In today’s Finshots, we explore whether Apple is trying to build its own potent search engine.
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In 2018, Apple hired John Giannandrea.
If you've not heard of him, know that he used to head Google’s search and artificial intelligence units. And naturally, rumours began swirling around — “Apple is going to launch its own search engine.”
Then in 2020, the whispers grew stronger. Because Google was caught in the crosshairs of an antitrust lawsuit. The US Government alleged that Google was monopolising the online search business. And an adverse ruling could have impacted both Apple’s bottom line and its customers.
How so, you ask?
Well, Google has been Apple’s default search engine for nearly two decades. And it pays Apple a mammoth $15 billion or more every year for that privilege. That’s nearly 9% of Apple’s gross profits. But if the antitrust committee ruled that Google was striking these unholy deals to cling on to its monopoly, they’d have to sever the cord. And Apple would lose the billions it made. Sure, it could switch to alternatives like Bing or DuckDuckGo, but let’s face it — they aren’t going to pay the same kind of money. Google controls 90% of the search market. They earn massive advertising revenue, so they can afford to splash the cash. But the others may not be able to justify the spending.
So yeah, if Apple wanted to get ahead of these potential problems, it would need an in-house engine. It would have to control everything. And it seems that it has been quietly building just that.
Outside of the recent hiring spree for the search engineering division, the Financial Times had earlier pointed out a couple more interesting things.
For instance, if you want to be a search behemoth, you start with something called a web crawler or a spider. This thing scours the internet and websites and creates an index of sorts. That way when someone searches for a specific item, the crawler can easily identify it and spit out the result. And for a long time, Apple’s web crawler simply lurked in the shadows. There wasn’t much online activity. But over the past few years, this Applebot apparently has featured heavily on websites scraping information. Apparently, the ‘crawl ‘rate’ or activity increased significantly starting in 2020.
Then there’s the fact that Apple has been slyly sneaking in a search feature since they launched iOS14 a couple of years ago. If you swipe right from the iPhone’s home screen to access the search windows, you get a list of search suggestions from Apple and not Google.
So yeah, Apple seems to have been stepping up its search game of late.
So, the question is — what is Apple waiting for? Why isn’t it launching its search function in full throttle?
Well, we can only speculate here but there might be two reasons.
Firstly, there’s all those billions of dollars of course. Sure, Google search might be facing an existential crisis with the rise of ChatGPT and GenZ turning to TikTok and Instagram to find answers, but the ad revenue from search is still making boatloads of money. And unless antitrust regulation forces Google to end the deal, Apple may not find a reason to let go of the money. Especially if it can’t ramp up its own ad search revenue at a similar pace.
Secondly, we’ve seen the debacle that was Apple Maps. Everyone hated it because directions were flawed. And iPhone users stuck to Google for a long, long time. But a decade after its failure, Apple has slowly but steadily climbed back as a credible rival. Maybe Apple didn’t want to repeat the mistake of releasing an imperfect software product in an area it does not have much experience.
But it appears that most of the pieces are ready. As per Bloomberg’s Mark Gurman, Apple now has everything in place should it wish to launch a rival. And maybe it won’t be long before Apple users prefer its in-house search capabilities over Google too. We’ll have to wait and see.