Sep 252010

Google confirmed it has recently extended its
search deal with Apple, keeping the leading search engine as the default app on Apple’s iPhone and

Google CEO Eric Schmidt alluded to the deal in an
interview with Charlie Rose, though declined to provide more color about the
deal terms, such as price and duration.

However, deals such as this typically cost hundreds of millions of dollars over two or more years. For example, Microsoft agreed to pay Verizon $500 million to ensure the carrier would run Microsoft search and and mapping software on mobile phones.

A Google spokesperson echoed Schmidt in a statement to eWEEK
Sept. 24: “I can confirm a renewal of the deal, but unfortunately can’t
comment on terms or any other details.”

Apple did not return request for comment. 

Renewing the agreement is a heady statement by two
companies whose competitive guns have become increasingly trained on one
another as they battle for position on the mobile Web.

Apple’s iPhone smartphone competes with devices running Google’s
open source Android mobile operating system. Apple also launched its iAd ad
platform earlier this year in a direct assault on Google’s mobile advertising

Apple bid to acquire AdMob in 2009 only to have Google
swoop in and spear the company for more money. Apple would acquire Quattro
Wireless, whose talent would  build iAd, which offers in-ad
applications running on its iPhone and iPad operating system, iOS.

Apple had initially forbade Google, AdMob or other
third-party ad platforms to be used on iOS because they competed with iAd, but relented last month.

Given these jousts, among others, it was widely rumored that Apple
would eventually drop Google for Microsoft Bing as its default search engine. Apple CEO
Steve Jobs
said in June this wouldn’t happen. Bing did become a search option on the iPhone.

For now, Google and Apple’s deal renewal solidifies the
companies’ cooperation in search.

How long Google and Apple remain simpatico given their increasing encroachment into each other’s businesses is unclear.

Google is rumored to be building a music store to compete with Apple’s iTunes, potentially opening
another ground for competition on the mobile Web between the two frenemies.

Incidentally, Schmidt
told Rose that Microsoft’s Bing search engine,
not Apple or Facebook, was Google’s top competition these days.

But they may just be brinksmanship, some faux homage to Microsoft’s historical ability to compete.

Bing, with 10 percent to 11 percent of the U.S. search market, is struggling to gain share versus Google, which retains a 65 percent hold on U.S. search.


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