Analyst Scott Devitt of Morgan Stanley has estimated that Google pays Apple up to a billion dollars each year to be the default search engine choice on iOS. That’s $1 billion in pure profit.
The two companies apparently have a per-device deal in place rather than a revenue sharing deal, he wrote in a report titled “The Next Google Is Google.” The fee-based co-operation was agreed on in order to simplify accounting and it lets Apple collect upfront payments.
By contrast, Devitt estimates that Google pays around $300 million annually to Mozilla to be the default search engine for Firefox.
While one billion in traffic acquisition costs isn’t much relative to Apple’s $13 billion in holiday quarter profit, it ain’t spare change either. Moreover, it just shows that Google is very much keen on having iOS users search the web using Google search…