The more I think about it, the more I may understand why Google became so fearful of Apple’s iPhone. First, Apple’s version of the smartphone was leaps and bounds ahead of every other technology then available, so much so that even Google’s Android team had to start over. Google was forced to give away Android for free to smartphone makers to prevent Apple from owning the entire industry (count the profits; Apple is still the dominating force).
Why was Google so afraid? The iPhone was more advanced that other smartphones, yes, but Google’s business– revenue and profits– hinged on search engine advertising on desktops and laptops, and the iPhone is a platform dominated by apps. That left Google’s bread and butter lying on the floor.
More than a few members of the technorati elite claim that Apple should buy Yahoo and get into the search engine business to compete with Google and Microsoft. Why? To what end? What’s in it for Apple? Hasn’t the company disrupted the search engine business enough already?
Google’s search business marketshare is about three times that of second place Microsoft Bing which is nearly double that of third place Yahoo. Google makes a boatload of profits on search engine advertising for traditional desktop and notebook PCs, but not so much on mobile devices. Indeed, the majority of Google’s mobile revenue and profits come from iOS devices.
Why should Apple get into the search business? Search has already been disrupted by a billion or so iPhone, iPad, and Android devices users who don’t use search the traditional way in a web browser. Instead, apps are the way users search and that often bypasses Google’s standard business model.
Is it any wonder that Google gives away Android OS for free to smartphone and tablet manufacturers? How else do you explain Google’s Chrome OS which eats away at the bottom feeder prices of traditional Windows notebooks?
Google is desperate because, and with little fanfare, Apple has disrupted the company’s revenue stream and profits. Apple’s iOS devices are so plentiful in number that if Apple simply built it’s own search engine, by passing a purchase of Yahoo, and made it the default search on all iPhones and iPads, Apple would come close to equaling Microsoft’s Bing marketshare with the next release of iOS.
Should Apple buy or build a search engine? Why? Apple has already disrupted the entire search engine landscape, almost without trying.