Did Yahoo CEO Marissa Mayer reveal something that she wasn’t supposed to?
On Monday, Mayer delivered Yahoo’s quarterly-earnings results, and she said something very interesting about Apple, her corporate neighbour in Cupertino.
During the conference call with analysts, she talked about Yahoo’s search business, mentioning companies that Yahoo has search partnerships with:
“With Search making up more than half of our GAAP revenue, it remains an important area of our business. Today, our search business is built on strong partnerships with Microsoft, Google, Mozilla, Apple, and Oracle, among others.”
The partnerships with Microsoft, Google, Mozilla, and Oracle are well known. But Mayer’s mention of Apple quickly raised eyebrows around the industry.
During Mayer’s last earnings call in April, she didn’t mention Apple, although she recited the other four major Yahoo search partners.
Macquarie Capital analyst Ben Schachter certainly noticed the mention, enough to touch on the remark in a research note to clients on Tuesday, even though Yahoo wouldn’t provide any additional details.
“If we are able to get more clarity on why the company mentioned Apple in regards to search … that may be of interest to shareholders,” Schachter wrote.
A Yahoo spokesperson said the partnership with Apple was longstanding, and involves letting users set Yahoo search as the default search engine in the Safari browser. The spokesperson declined to discuss whether the arrangement includes any financial terms, or to explain why Yahoo omitted mentioning it in the previous earnings call.
“Yahoo has a long-standing Search partnership with Apple, allowing any user to set Yahoo Search as the default on the Safari Browser,” Yahoo said in a statement provided to Business Insider.
Yahoo and Apple do have active partnerships. Yahoo content powers the stocks app and the weather app preinstalled on all iPhones, for example, and users can choose Yahoo as an option for Safari search in iPhone and Mac settings.
But in 2013, the Wall Street Journal reported that the two companies were in talks to pre-install more Yahoo content on iPhones and iPads.
The report even suggested an “expanded Siri partnership” and said that Yahoo was pursuing “ways in which it could become a bigger provider of Web-search results for Apple devices.” Microsoft’s Bing is currently the default search engine on Siri.
But the real gem that Apple possesses is the default search bar on the iPhone, which drives an insane amount of traffic, given the number of iPhones currently in use.
Currently, Google gives Apple a percentage of the revenue that it generates through the iPhone’s default Safari search bar.
Earlier this year, a Google employee testified that Google had paid Apple $1 billion in 2014 for iPhone search, and that the revenue share was 34% at some point.
People have speculated that Apple could ditch Google as the default search on the iPhone for the past five years. At the very least, if Apple were in talks with Yahoo, it could force Google to give it more favourable terms.
And there’s some speculation that Apple wants to remove Google entirely from the iPhone, considering that Android competes directly with Apple products. Apple already took the step of building its own maps so that Google Maps would no longer be the default. But Google’s search is still objectively the best experience.
There’s also the possibility that Apple is building its own search engine, or building Siri in a way that could intercept iPhone users on their way to Google.
The Information has reported that Apple’s deal with Google expired in 2015, with both Yahoo and Microsoft pitching Eddy Cue, Apple’s internet services boss, to replace Google.
Nothing has changed in terms of the iPhone’s default search since then — it remains Google. Apple declined to comment.
Know anything about Apple’s search engine? Email the author at [email protected] This article has been updated with Yahoo’s statement.