Apple declined Microsoft $15B offer against Google $10B for default search engine on iOS devices.

Apple declined Microsoft $15B offer against Google $10B for default search engine on iOS devices.

Very interesting WHY!?

8 months ago, Satya Nadella said that he was going to make Google dance. Yesterday he said, sorry guys Google is very powerful, Microsoft can’t do anything against it. What happened? Why did Satya Nadella completely change his position on Google? Let’s find out:

To find out the reason, let’s go back 9 months. January 2023. Microsoft had just announced a $10 billion investment into OpenAI.

The world was amazed. Microsoft, once a boring tech company, suddenly became a sexy tech company doing AI shizz.

One month later, in February, Microsoft launched the AI version of Bing, Bing Chat, powered by OpenAI’s GPT4, which was powered by the 10 billion that Microsoft has given to OpenAI one month earlier.

The world was more amazed. For so long, Bing was stuck at 3% market share in search engine market.

Now, it looked like the AI version of Bing would finally defeat Google and win the search engine market.

Satya Nadella publicly declared that AI Bing was going to make Google dance.

8 months later: Bing is still stuck at 3% market share. In fact, its market share has slightly declined.

Why? What happened?

The answer to this question was given by Satya Nadella yesterday. He was called as a witness in the court case of Govt of America vs Google.

He said that no one can beat Google’s monopoly in search because of one factor: “default”.

Google Search is the default option on Android phones. Google pays Apple 10 billion every year to be the default on iPhones.

People are lazy. They stick with whatever the default option is. They don’t change it.

That’s why no one can beat Google Search, even if they make a better search engine. Google is the default option everywhere.

Satya Nadella said that he had tried to break this monopoly a few years back. Microsoft had offered 15 billion per year to Apple to make Bing the default on iPhones.

In fact, Satya Nadella was so desperate that he even offered to remove the Bing branding from Bing and put Apple branding instead.

Why?

Because he knew that once Bing became the default on iPhones, people would stick with it.

So Bing would get a lot of data from so many people doing so many searches everyday. Bing would use this data to improve and attract more users and gain more market share against Google search.

But Apple rejected Satya’s offer and remained with Google. And Bing remained at 3% market share.