Prediction: Apple Will Not Renew Google As Safari Default Search Engine

Both parties now have incentives to let go of the deal.

I’m going to predict that Apple and Google will not renew their Safari default search deal in the U.S. Both parties now have reasons not to renew.
We don’t know precisely when their deal is up, but we know it’s this year. Previously, The Information reported that Microsoft and Yahoo are independently competing for the Safari business and that Apple’s Eddie Cue is supervising the bake-off. Sources told The Information that Apple’s decision will be based “on the quality of the product as much as the potential money made from search ads.”
In 2011, Macquarie Capital estimated that Google earned $1.3 billion in search-related revenue from its default position on Safari. Of that, Google was supposed to have paid Apple over a billion dollars. In 2013, Morgan Stanley also estimated that Google paid Apple over $1 billion annually for the privilege of being the Safari default.
If these figures were correct at the time, they’re likely out-of-date today. If anything, there’s more mobile search volume and more revenue than in 2011 or 2013. Google’s net profit from Safari is substantially less than the $1 billion it probably pays Apple. Google is therefore probably willing to bet that its net will go up if it walks away from the deal.
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