What would Superman be without Lex Luther? Unlike how Apple Inc. (NASDAQ:AAPL) threw Adobe to the wolves, regarding Flash, following years of mutually benefiting each other, Google Inc (NASDAQ:GOOG) and Apple know they need each other. If you don’t believe this, look at Apple’s efforts to create their own maps program. In Google’s case, while their Android platform continues to grow in user-ship, they quite simply can’t afford to be left out of Apple’s iOS search. Preferably as the default search provider.
It’s with this understanding that according to a Morgan Stanley (NYSE:MS) report titled “The Next Google Is Google,” Google may be forced to shell out roughly $1 billion in order to continue to be not only the default search provider on iOS, but the default ad provider and data collector. $0.25 for every $1.o0 taken in will remain with Google.
This proves that my grandfather was right, “25% of something is better than 100% of nothing.” Google Inc (NASDAQ:GOOG) seems to understand this and is ponying up accordingly. By means of comparison, Google paid a “pittance” of $82 million for this in 2009 a stark contrast to the estimated $1 billion in 2014.
It has been clear for some time that in a perfect world Apple Inc. (NASDAQ:AAPL) would love to be producing a Google-free phone. This is a perfect world and for anyone who picks up a newspaper, or more likely logs on to a news site, it doesn’t take more than a few moments to grasp the fact that the world remains imperfect.
Why does Apple Inc. (NASDAQ:AAPL) want a Google-free phone? The answer is simple. Google Inc (NASDAQ:GOOG) and Apple Inc. (NASDAQ:AAPL) are stark rivals in nearly everything they do. While Apple is happy to take money from Google, they are, at the end of the day, financing a war with itself. Microsoft Corporation (NASDAQ:MSFT) has become irrelevant and one needs only look at Bing to see why.
Google Inc (NASDAQ:GOOG) is paying a staggering amount of money to simply be the default search option on iOS, because default is all that matters. Other options exist but are rarely employed by users. I do, however, question if this payment to Apple Inc. (NASDAQ:AAPL) is worth it. If Apple were to take $2 billion from Microsoft Corporation (NASDAQ:MSFT) to make Bing the default search choice, I’m certain I will take the time to change. My guess is that millions of others will as well.
For now, these two seem complicit in the growth of one another and as long as their stocks continue to grow, this won’t change anytime soon.