How much did Google pay for distribution on the iPhone?

Research 27 September 2010 · 2 comments

I'm willing to bet that Google pays between $5 to $10 per iPhone for the privilege of default search. I think that's where Schmidt got the figure for what Android is worth. It also makes sense given the rumor that surfaced that Google paid $100 million for the default search placement in the first round.

Via Appleinsider: Google extends deal with Apple to remain default iPhone search.

2 comments

andy · 27 September 2010, 13:37

Horace, enjoy the blog. the link to appleinsider is missing a :

David Chu · 27 September 2010, 15:03

The average revenue per user for Google was about $20 per year the last time I ran the figures about a year ago. If the average iPhone user keeps their phone for three years, then at $10 a phone it costs Google about $3.30 a year per user to be the default search engine.

If Google is paying a 15% premium and the cost of delivery is about 35% of revenue, then this data may suggest that more than 50% of search activity by iOS users are done on their devices.

That's pretty damn crazy. Talk about sticky.

andy · 27 September 2010, 13:37

Horace, enjoy the blog. the link to appleinsider is missing a :
David Chu · 27 September 2010, 15:03

The average revenue per user for Google was about $20 per year the last time I ran the figures about a year ago. If the average iPhone user keeps their phone for three years, then at $10 a phone it costs Google about $3.30 a year per user to be the default search engine.
If Google is paying a 15% premium and the cost of delivery is about 35% of revenue, then this data may suggest that more than 50% of search activity by iOS users are done on their devices.
That's pretty damn crazy. Talk about sticky.

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