Apple’s options for search

on November 27, 2014

I did a post for Insiders last week about Mozilla’s new search deal with Yahoo which replaces Google as the default search engine in Firefox in the US. But as part of that post, I also briefly touched on the fact Apple is also a major referrer of search traffic to Google and has the potential to make a much more disruptive move should it choose to replace Google as the default search engine in iOS. I wanted to explore that idea a little further this week, especially since The Information is reporting this deal is up for renewal next year.

A precedent in iOS 6 and Maps

As I mentioned in that piece, the best starting point for a discussion about what Apple should – and will – do when this decision comes around is what Apple did with Maps in iOS 6. If you cast your mind back a couple of years, Apple had a long-standing relationship with Google as the provider of tiles and data for the iOS Maps application and, in 2012, Apple decided not to renew that relationship and instead decided to go its own way with maps, creating its own application and sourcing data from a variety of providers in order to make the switch. How you see that decision in retrospect likely significantly impacts your view on whether Apple should or will make the switch away from Google as the default search provider in Safari.

So, did the Maps decision turn out to be a good one or a bad one? Was it a rare exception to Apple’s usual focus on putting the user experience first and therefore a mistake, or was it a calculated strategic move which had short term downsides but long term benefits, both for Apple and its users? I did a post a year ago on this topic on my personal blog and the conclusion I reached then was it likely benefited Google, which went from not monetizing any of its iOS usage to monetizing all of it, albeit with a smaller share of total usage. Meanwhile, Apple got a black eye in the press and with users over the inferior original experience, but around 60% of iOS users now use Apple Maps at least once a month, suggesting they consider the experience good enough. Overall, I’m inclined to think Google didn’t come off too badly and Apple likely thinks the tradeoff was worth it over the long run, despite the pain in the short run.

Limits to the precedent

However, this isn’t an exact like-for-like decision. Search and Maps are very different services, and Google’s position in both services is very different too. Though the iOS Maps app was based on Google Maps data and tiles, it wasn’t a fully Google-branded experience – it had something of an Apple wrapper around it and the Google branding was subtle. The new app therefore looked different, but wasn’t obviously badged differently. In addition, Maps is an occasional use service – something you use when you don’t know where you’re going, or are looking for some place new. Search is something many people use on a daily basis and both Google’s brand and its dominance in search are greater than either are in Maps, despite its strengths. Some 90% of US smartphone users access Google’s various sites through their browser in a given month, compared with just 45% or so for the Google Maps app. As such, swapping out the default search provider has the potential to be much more disruptive on an everyday basis to most users than swapping out maps data.

On the other hand, there are reasons why this might actually be easier: part of what was so jarring about Apple’s Maps experience was the look and feel changed significantly, not just the underlying data. It was a very noticeable change. On the other hand, with most search providers now offering, visually at least, an almost indistinguishable list of ten blue links, switching the default search provider might actually be less jarring visually, with the exception of the logo in the top left corner. I’ve experimented with changing the default search provider on my iPhone over the last few months and it often takes me a second to remember I’ve made the switch, at least visually (I cynically speculated last week that Yahoo’s revamped “search experience” in Firefox is designed to look as similar as possible to the Google search results page). However, it’s been more noticeable in the search results themselves which, for less mainstream queries, have been clearly inferior both for Microsoft’s Bing and DuckDuckGo. For popular queries, the results are comparable, but for more obscure or detailed searches, Google still comes out on top in my experience. And that’s the worry here – just as the switch away from Google Maps produced a worse user experience, at least in the short term, so might a switch away from Google search.

Bad for Google, likely bad enough for Apple not to do it

For Google, the switch in search would be far more damaging than the switch in Maps. With Maps, though Google no doubt generated useful data from iOS users, it generated no direct revenue, since it couldn’t serve up ads within the iOS interface. Once it switched to a third party app, it was able to monetize it, even with a smaller share. However, Google significantly monetizes the search traffic it gets through iOS today, to an extent its payments to Apple each quarter are in the hundreds of millions of dollars. As such, a switch away could put a significant dent in Google’s overall search revenues, especially since many people don’t change defaults.

Ultimately though, the question comes down to this: is Apple willing to sacrifice the user experience in the short term to serve strategic objectives, as it did with replacing Google Maps? Or does it now view that as a strategic mistake it doesn’t want to repeat? Whether or not Apple ends up replacing Google as the default search provider depends to a great extent on how it answers that question internally. I suspect Apple will come down on the side of keeping Google and preserving the best possible user experience, at the expense of its strategic objectives, and Google’s iOS-driven search revenue is therefore likely safe. However, I also think it’ll continue to bolster its efforts to answer users’ queries before they ever reach the list of blue links, in Siri, in Spotlight and elsewhere, which will continue to have a smaller but significant impact over time.