A big deal is quietly up for grabs in the technology industry this year.
Google’s deal to be the default search engine on Safari, Apple’s web browser is ending. Microsoft and Yahoo are both trying to win this deal away from Google.
Microsoft is the default search engine for Siri, Apple’s voice-activated software, so it would seem to be in the lead position, should Apple decided to drop Google.
However, there’s gossip spreading in the Valley that Marissa Mayer is feeling fairly confident that she can land a deal with Apple to be the default search engine. She thinks Apple wants to ditch Google, and she thinks Yahoo would be a great partner for Apple.
This would help explain why Mayer was so chatty about Safari on Yahoo’s earnings call.
Mayer was asked about the possibility of Yahoo being the default search engine on Safari. Rather than deflect the question with a generic statement like, “we don’t comment on potential partnerships,” she spoke about why she wants Yahoo to win the Safari search deal.
“The Safari users are among the most engaged and lucrative users in the world and it’s something that we would really like to be able to provide,” said Mayer, via Seeking Alpha’s transcript. “We worked really closely with Mozilla to ultimately bring to their users an experience that they designed and that they feel really suit those users and we welcome the opportunity with any other partner to do the same, particularly one with Apple’s volume and end user base.”
While Safari isn’t big on the desktop, it’s much more important in mobile, where the iPhone dominates in mobile commerce and web traffic.
Safari has 44% of mobile and tablet share, while Chrome and Android have 40%, according to Netmarketshare data.
In terms of commerce, during the holiday period IBM said, “iOS sales accounted for 21.9 per cent of total online sales, nearly quadruple that of Android, which drove 5.8 per cent of all online sales.”
People that are willing to spend money the kinds of people that advertisers want to target with their advertising. That makes Safari’s searches quite valuable.
Previously, Morgan Stanley estimated Google is paying Apple $US1 billion annually to be the default search engine on the iPhone. So, Yahoo would have to pay at least $US1 billion, but it should be able to make that up selling search ads.
For Apple, it’s not going to be all about money. While $US1 billion in pure profit is nice, Apple made $US18 billion in profit last quarter. If it really did collect $US1 billion from Google, that’s only 1.4% of Apple’s quarterly profit.
Besides, Google, Microsoft, and Yahoo can all afford to pay for the default search slot.
For Apple, it will come down to user experience. Which search engine delivers the best experience for users?
Clearly, Mayer thinks she can do that at Yahoo for Apple. Here’s another snippet of what Mayer said on the call:
“Well, certainly on search and across the board we pride ourselves on being the best partner in Silicon Valley. We work across the board with Google, Microsoft, Apple, Facebook, Twitter, we have different Samsung, we have different partnerships with all of these different providers and it’s not easy, they can’t look at each other but we work well with them. And one of the reasons we work well with them is we try and be as flexible in our approach to partnerships as we can be. We really, especially when approaching a search partnership, we acknowledge that these users belong to that distribution partner and they should be able to present search the way that they really want search ultimately presented. And so we work with the partner as we did with Mozilla, to really design the best possibly user experience that they feel really suits their users, their values, their environment.”
In terms of working with Apple, this could be important. Apple has a certain design language that it uses in its native applications. But, when someone does a search in Safari, they get Google’s design language delivered to them.
Apple’s head of design, Jony Ive, is a fan of Mayer’s design work at Yahoo. One of the first products Mayer released when she became CEO of Yahoo was a redesigned weather app.
In a new book on Yahoo, Nicholas Carlson reports that Ive saw Mayer at an industry event shortly after the app was released. He sidled up to Mayer, and said, “I’m tormented by the Weather app, Marissa… I’m so jealous. I don’t get jealous.”
A few months later, Apple redesigned its weather app and it looked exactly like the Yahoo Weather app, as you can see here. Apple is on the left, Yahoo on the right.
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