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Microsoft reportedly tried to sell Bing to Apple in 2018, but that failed.
The sale was unsuccessful because Apple was concerned about Bing’s search quality, advertising unit and monetization capabilities, according to a document in Google’s antitrust lawsuit against the U.S. Department of Justice.
Google said the failed sale highlights that Bing lost because it is an inferior search engine, not because Google has made the search market unfair to its competitors. CNN.
Apple rejects Microsoft. Microsoft is said to have proposed selling Bing to Apple or setting up a Bing joint venture. Eddy Cue, Apple’s Senior Vice President of Services, explained in the filing why Apple said no to Microsoft:
- “Microsoft’s search quality, their investment in search, everything was not important at all. And so everything was lower. So the search quality itself was not that good.”
- “They weren’t investing at any level comparable to Google or what Microsoft might invest in. And their advertising organization and the way they generate revenue wasn’t very good either.”
What Google says. Google claims that Microsoft’s failed attempt to sell Bing to Apple shows that Bing is an inferior search engine. Google wrote in the filing:
- “In both cases, Apple took a hard look at the relative quality of Bing versus Google and concluded that Google was the superior default choice for its Safari users. That is competition.”
Google also claims that Microsoft approached Apple several times – in 2009, 2013, 2015, 2016, 2018 and 2020 – with a proposal to make Bing the default search engine in Apple’s Safari web browser. However, Apple consistently rejected the idea, citing concerns about the quality of Bing’s performance.
What Microsoft says. Microsoft denies its attempts to sell Bing to Apple were due to quality issues – on the contrary, the tech giant claims that sales were blocked by Google. Microsoft’s CEO of Advertising and Web Services, Mikhail Parakhin, said he offered Apple more than 100% of sales or gross profit to make Bing its default search engine, but the proposal was rejected due to Apple’s deal with Google.
During the federal antitrust trial, Parakhin claimed that this happened despite the fact that Microsoft offered to pay Apple more than Google – which he said offered about 60%. He said:
- “We were just big enough to play, but probably not big enough to win, if that makes sense.”
What the DOJ says. Google has entered into a financial agreement with Apple to become the default search engine for its products, at a cost of about $10 billion per year. Additionally, Google pays for Apple’s advertising revenue, which is one of the search engine’s largest expenses. The Justice Department claimed in its filing that Apple CEO Cue testified:
- “If Apple had not received the massive payments it demanded from Google, Apple would have developed its own search engine,” the Justice Department alleged in its filing.
Google could pay Apple as much as $19 billion this fiscal year, according to an estimate from Bernstein analyst Toni Sacconaghi. The DOJ claims that these substantial sums of money are why Apple turned down a potential joint venture with Microsoft – not because Bing is inferior to Google.
Why we care. The US Department of Justice is suing Google, claiming it uses unfair tactics to maintain its position as the world’s top search engine. If Google can demonstrate the superiority of its search engine, it could be successful in this case. However, if Google loses, Google could lose its status as the automatic default search engine on mainstream Apple products, potentially threatening its dominance in the search market.
Market share statistics. The US Department of Justice claims that Google has a 90% market share in search results. On the other hand, Bing has 3% of the global market share, according to the report StatCounter.
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