Mon. Jun 24th, 2024

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Microsoft Corp. discussed selling its Bing search engine to Apple Inc. around 2020, a deal that would have replaced Google as the default option on the iPhone maker’s devices, according to people with knowledge of the matter.

Apple and Microsoft are now embroiled in the government’s suit against Google, with executives from both companies testifying at the ongoing trial(Reuters file)
Apple and Microsoft are now embroiled in the government’s suit against Google, with executives from both companies testifying at the ongoing trial(Reuters file)

Executives from Microsoft met with Apple’s services chief, Eddy Cue, who brokered the current search engine relationship with Alphabet Inc.’s Google, to discuss the possibility of acquiring Bing, said the people, who asked not to be identified because the situation was confidential. The talks were exploratory and never reached an advanced stage, they said.

Over the years, the companies have discussed other ways to make Bing the preferred option, though Apple ultimately stuck with Google. Those talks have taken on fresh significance now that the US Department of Justice is in a legal fight with Google to show that the company abused its search dominance. Apple’s relationship with Google, which pays billions of dollars to give its search engine a prime spot in the iPhone and other devices, is central to the case.

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Representatives from Microsoft and Apple declined to comment.

Microsoft launched Bing in 2009 as a rival to Google, but the property has never gained market share in a meaningful way. Google still rules the industry, with Bing accounting for less than 10% of searches.

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Apple and Microsoft are now embroiled in the government’s suit against Google, with executives from both companies testifying at the ongoing trial. The Justice Department is using the Apple deal as evidence that Google unfairly dominates the search market. In testimony earlier this week, Apple’s Cue pushed back on that assertion, saying his company uses Google because it’s the best search option available.

Apple and Google struck their first search engine accord in 2002, ahead of Apple releasing its first Mac web browser. Over time, the agreement expanded to Apple’s new devices, most notably the iPhone. By 2020, Apple was collecting $4 billion to $7 billion annually from the arrangement, according to the DOJ.

The agreement covers the Safari web browser for the iPhone, iPad and Mac, and the Cupertino, California-based company gets a percentage of the revenue that Google makes from searches in the Apple browser.

The money generated by the Google deal was a key reason why Apple declined acquiring Bing, according to the people. The company also had concerns about Bing’s ability to compete with Google in quality and capabilities, they said.

Still, Apple has used Bing in parts of its operations. The Microsoft product was its default web search engine inside of Siri and Spotlight — the feature that conducts searches from the iPhone and iPad home screen — between 2013 and 2017. But the company reverted back to Google in 2017 as part of an updated revenue-sharing agreement. Bing remains an option for Safari search.

In court on Thursday, Microsoft business development executive Jon Tinter said that his company weighed making a multibillion-dollar investment in its relationship with Apple in 2016, an effort to outspend Google and make Bing the default option on Apple devices. The chief executive officers of both companies, Tim Cook and Satya Nadella, even met to discuss a deal, Tinter said.

Today, Google remains the search engine inside of Siri and Spotlight, as well as the default option in Safari. During his testimony, Cue said that the Apple and Google deal was extended in 2021. That would have been a year or more after Microsoft’s pitch to sell Apple its Bing unit.

‘Bing’s technology inferior to Google’s’

Cue implied that Bing’s technology was inferior to Google’s, saying that he doesn’t “know what we would have done” if negotiations with Google ever fell apart.

If Apple had ultimately purchased Bing, it’s unlikely that the company would have simply integrated the brand into its platform. With past acquisitions, Apple has bought underlying technology and resources in order to build a new feature.

In his testimony, Cue stressed that Apple sees no need to develop its own search tool because Google clearly is the best option. That differs from the company’s approach in other areas. It competes with Google in mapping software and voice assistants, as well as operating systems for phones and computers.

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