Microsoft’s Search Engine Agreement with Apple is Back in the Spotlight as Part of the Antitrust Lawsuit

The potential search engine agreement between Microsoft and Apple was fraught with significant financial risks. While the idea of making Bing the default search engine in Safari aimed to increase competition, it ultimately did not materialize.

According to Microsoft Vice President Jon Tinter’s testimony in the Alphabet Inc. antitrust case, in 2016, Microsoft approached Apple with an offer to make Bing the primary search engine for Apple products as part of a multi-billion-dollar investment.

Microsoft’s Approach

Microsoft CEO Satya Nadella and Apple CEO Tim Cook played significant roles in these potential collaboration talks. However, one of the key figures behind the scenes was Microsoft’s Vice President of Business Development, Jon Tinter. Tinter had discussions with Cook during the Department of Justice’s antitrust case against Alphabet, and crucial decisions were made during these discussions.

Such a search engine agreement would involve Microsoft or Google sharing ad revenue associated with user queries with Apple. Because Bing is much smaller than Google, Microsoft would have had to offer Apple a significantly larger percentage of the revenue, at least initially, and would have incurred a financial loss in this deal.

This project would have required a substantial investment, and Microsoft would have had to bear a significant loss. Tinter explained this situation with the following words:

“To turn it around, it would have been a very significant loss. We told our board that we were contemplating making a very substantial negative investment in this business.”

Google’s Countermove

Microsoft’s attempt to replace Google in Safari prompted a swift response from Google. Google expanded its own agreement with Apple, which resulted in Bing being used in Apple products, thwarting Microsoft’s plans.

As a result, Microsoft’s proposed search engine agreement with Apple would have required a substantial investment and could have resulted in the company incurring billions of dollars in losses. However, this agreement did not come to fruition, and the tech world progressed in other ways.

Source: Bloomberg

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