A Big-Picture Look at Google, Microsoft, Apple And Yahoo
On Wednesday, I wrote about a battle looming between Apple and Google as discussions take place over the possibility of Apple making Microsoft's Bing the default search engine on the iPhone. — Stepping back further …
Context & Ripple Effects
This Bits column zooms out from a specific report: Business Week's account earlier this week of Apple-Microsoft discussions over making Bing the default search engine on the iPhone — a claim still unconfirmed by either company. The piece frames those talks against comScore figures showing Google Sites handled roughly two-thirds of the world's 131 billion December searches, while Bing drove meaningful share gains for Microsoft through 2009.
The framing echoes an older argument: Forbes made the case back in June 2007 that Apple wins whenever Microsoft and Google fight each other, because both rivals need Apple's hardware more than they need each other. With Google now selling its own Nexus One phone and Microsoft courting Apple's platform, the same triangle has moved from the PC desktop onto the phone.
First-order effects
- If the rumored deal went through, Google would lose default-search placement on the fastest-growing search surface — the iPhone — while Microsoft would buy distribution it could never earn organically against Google's two-thirds worldwide share.
- Yahoo, absent from the talks despite being named alongside the other three, faces further marginalization as the search market consolidates around a Google-versus-Bing contest fought through Apple.
Second-order effects
- Google's counter-moves are already visible: the Nexus One launch puts it in the handset business directly rather than relying on carrier or OEM placement, and new relevance improvements building on Google Squared and Rich Snippets defend the quality gap that defaults alone cannot close.
- Microsoft's Bing momentum gives it leverage to bid for default slots across other platforms, forcing carriers and device makers to treat search placement as a priced asset rather than a bundled afterthought.
Third-order effects
- If handset makers can auction the default slot, search economics shift from winning users one query at a time to winning gatekeepers — a structure where Apple, controlling the iPhone, collects value from both suitors regardless of which engine ships.
- That dynamic extends the 2007 pattern into mobile: as long as Microsoft and Google see each other as the primary threat, the hardware platform holder — not either software giant — captures the bargaining surplus.
The trend: Search competition is migrating from the desktop homepage to default placements on mobile devices, turning platform holders like Apple into the gatekeepers who set the terms.