Google paid $7.2 billion to Apple and Android device makers last year to become the default search engine on mobile devices, PingWest reported Oct. 11. Google search is one of the most widely used search engines in the world, but that doesn’t mean users voluntarily make it their default search engine. To become the default search engine, Google paid mobile device makers a record $7.2 billion in “traffic acquisition costs” last year alone.
The $7.2 billion in fees represented 11% of Google’s annual revenue, up from 7% in previous years. Google will have to pay more in the future, given the increased regulatory scrutiny in Europe. Apple recently changed the default search engine on iOS 11 from Bing to Google, which will drive more traffic to Google.
Proportionally, Apple accounts for a significant portion of Google’s search engine spending, and will do so this year. Wall Street expects Google to pay Apple about $3 billion this year. It should be noted that Google’s recent push into hardware helps reduce this “traffic acquisition cost.”
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