Apple's Strategic Maneuvers: The Consideration of Bing Acquisition

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In a twist of events, recently unsealed testimonies reveal that Apple, the tech behemoth, had once considered acquiring Microsoft's search engine Bing. This strategic move aimed to mount a challenge against Google's stronghold in the search engine industry. This disclosure provides a rare insight into the behind-the-scenes maneuvering in an industry heavily dominated by Google.

We are unraveling the strategic plays and potential shifts in the tech industry.

Apple’s Consideration and the Lucrative Google Agreement

John Giannandrea, an Apple senior vice president, testified that Apple had considered the possibility of acquisition. However, the tech giant decided to forego this plan in favor of continuing a profitable revenue-sharing agreement with Google. It's worth noting that other major smartphone manufacturers also maintain similar deals with Google.

Sanford Bernstein, an equity research firm, estimates that Google will pay up to $19 billion this year alone to remain the default search engine on Apple's devices. Apple's executives rarely publicly discuss this pact, making these revelations even more noteworthy.

The Antitrust Trial against Google

These revelations came to light during a landmark antitrust trial against Google, the first of its kind in over two decades. The Justice Department’s case has drawn criticism for its secrecy, prompting Judge Amit Mehta and Google to reverse course and make more of the testimony public.

Apple's Strategy to Intercept Search Queries

Giannandrea's testimony also gave insight into Apple's strategy to chip away at Google's dominance. He revealed that Apple had begun intercepting a modest number of search queries from its Safari search engine with its "Safari Suggestions" feature instead of passing all questions directly to Google.

The Bing Acquisition Talks

Giannandrea further disclosed that Apple held talks with Microsoft in 2018 regarding the possibility of acquiring Bing. The discussions were kept under wraps due to the difficulties of operating a product in the face of impending sales. However, after careful evaluation, Apple decided against the acquisition of Bing, rejecting the deal put forth by Microsoft.

Apple Leveraging Bing as a Bargaining Chip

Interestingly, the transcript also revealed how Apple leveraged Bing as a bargaining chip during its revenue-share negotiations with Google. In an internal email, Adrian Perica, an Apple vice president, wrote: "We build them (Microsoft) up, create incremental negotiating leverage to keep the take rate from Google, and further our optionality to replace Google down the line."