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Apple Search could be part of a ‘silent war’ on Google

There have been suggestions for years now that the iPhone maker is quietly working on an Apple Search service, to compete with Google. That idea is back in the news today, in a report suggesting that it could be one element of a three-part “silent war” on Google.

Recent developments do support the idea that the Cupertino company is gearing up to take on Google in a much more direct fashion than it has so far …

Apple Search background

Google has long paid Apple billions of dollars a year to be the default search engine in Safari. In other words, the search engine that is used when you simply type your search term into the combined address/search bar. That drives traffic to Google, which profits from selling ads in the search results.

Google’s payment is believed to have started at $1B in the first year, and was estimated to have risen to $18-20B last year, with an even larger payment due this year.

However, Apple uses other search engines like Microsoft’s Bing in the background, for Siri searches. It has also long been rumored that Siri and Spotlight searches are in part handled by a search engine developed by Apple itself. This idea is lent weight by the company’s occasional acquisition of search companies like Topsy Labs and Laserlike.

Until very recently, however, there have been no outward signs of progress, with experts suggesting that an Apple Search service is still years away as yet.

Apple Business Connect

There has, however, been one very recent development that does suggest Apple is preparing to go more head-to-head with Google: the launch earlier this month of Apple Business Connect.

Apple has debuted a new tool today for businesses of all sizes to help “claim their location place cards and customize the way key information appears to more than a billion Apple users” […]

Along with helping businesses manage how they show up in Apple Maps, Business Connect will also work to organize how a company’s information appears across Apple’s Messages, Wallet, Siri, and other apps. There’s also a new way for businesses to highlight promotions, discounts, seasonal offers, and more.

While businesses can currently do all of that for free, it has all the hallmarks of Apple preparing to turn it into a potentially huge revenue-generating service – with much of that revenue replacing money businesses currently spend with Google.

A three-part “silent war” with Google

The Financial Times suggests that Business Connect could be one element of a three-part move to compete with Google:

  • Apple Maps (including Business Connect)
  • Apple Search
  • An Apple ad network

Apple Maps with Business Connect

The FT describes the launch of Business Connect within Apple Maps as a direct challenge to Google.

This is a direct challenge to Google Maps, which partners with recommendations platform Yelp to offer similar information and makes revenues from advertising and referral fees.

Business Connect goes further by taking advantage of Apple’s operating system to give iOS users unique features, such as seamless integration with Apple Pay or Business Chat, a text-based conversation tool for commerce.

While this is a long-standing rumor, the big question had always been whether Apple would want to get into what is currently a rather murky business. Google’s business model is in very large part driven by the ability to serve personalized ads, which reflect our search and web-browsing history. This is something that Apple considers too intrusive, and has sought to block though initiatives like App Tracking Transparency.

However, one strategy chief believes that Apple might take the financial hit of running its own search engine without personalized ads.

Josh Koenig, chief strategy officer at Pantheon, a website operations platform, said Apple could quickly take a bite out of Google’s 92 per cent share of the search market by not making Google the default setting for 1.2bn iPhone users.

“If Apple could build something that was essentially as good as ‘Google classic’ — Google circa 2010 when it was a simple search engine less optimised for ads revenue — people might just prefer that,” Koenig said.

Apple ad network

Apple has gradually grown its ad business over the years, including major expansion in App Store ads. One high-profile hire suggests that Apple plans to develop its own ad network – directly competing with Google, but in a privacy-respecting form.

The company hired former Google and YouTube exec Keith Weisburg for a role described as “driving the design of the most privacy-forward, sophisticated demand side platform (DSP) possible.” A DSP is a single tool that lets advertisers buy ads on multiple exchanges.

9to5Mac’s Take

The FT piece opens with the suggestion that Apple is still motivated by the “thermonuclear war” Steve Jobs started back when Android was launched, accusing Google of copying iOS. That’s not really credible as a motivation these days, and the idea of an Apple Search service is one that has been around for many years, not anything new.

However, it is undeniably the case that Apple has significantly ramped up its ad business over the past year or so, and Business Connect does seem to point very clearly to far greater ambitions in this area. The job listing for Weisburg’s post also spelled out very explicitly that Apple plans to create a broader ad network.

Google currently dominates online advertising, but its business model of maximizing the use of personal data to sell personalized ads is under increasing threat, not just from Apple, but also from regulators. Just this month the company settled a $23M case for unlawful sharing of search data with advertisers, and only yesterday the US Department of Justice announced plans to “unwind Google’s monopolistic grip on the [advertising] market.” 

There has never been a better time for a privacy-respecting company to take on Google head-to-head, and nobody is better placed than Apple to do it.

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