Apple Income From Google Referrals.
by Tom Reestman
I’m not sure why this is; it’s not a lot of money for Apple’s bottom line, and I believe their primary goal with Safari is to help establish more web sites on open standards (e.g., not IE-specific).
Anyway, the reason I’m writing about this is I take exception to one thing Gruber mentions:
One might also presume – as I do – that Apple has better negotiators than the Mozilla Foundation, and that Google pays Apple more per referral than they do Mozilla. (E.g., Apple may well argue that Safari users, as a whole, are demographically more appealing than Firefox users.)
Gruber explains in a footnote that by “better negotiators” he means Steve Jobs.
The reason I take exception to this isn’t because I question Jobs’ negotiating skills. I do not. Rather, I think what makes him a great negotiator is that he knows when he has something to negotiate with, how much it’s worth, is great at playing “chicken”, and likely calls a mean bluff.
But Gruber’s example that Safari users are “demographically more appealing” makes little sense to me. Firefox users are clearly pretty savvy — after all, they’ve gone out of their way to avoid the default browser on their Windows PC or Mac.
Sure, you can argue (and there are statistics to back it up), that Mac users use the internet more, and spend more. But someone using Firefox on the Mac is already in that demographic anyway. The idea that a Safari user on a Mac is somehow more savvy than a Firefox user on a Mac would make no sense.
This is how I see such negotiations taking place:
Jobs: We’ve calculated what you pay Mozilla per referral, but our user base is more savvy so we expect 10% (Note: insert your own percentage) more.
Google: We don’t see your user base as being any more savvy than the Firefox user base, whether on Windows or Mac OS X, so, no.
Jobs: Fine. We’ll just make Yahoo! the default search engine on Safari.
Google: OK. Your savvy users will change the default to Google anyway. And we won’t have to pay you a dime.
Jobs: Nope. We won’t offer Google as a search option.
Google: It’s your funeral. Hey, while you’re at it, remove it from the iPhone, too. Meanwhile, there will arise such a hue and outcry from your user base we think it’ll take maybe two weeks before you recant with some silly excuse and bring Google back as an option. Then your users will switch to it, and did we mention that when that happens we won’t have to pay you a dime?
Jobs: Well, um, I’ll get back to you on that…
(A huddle of Apple execs ensues, where Schiller slaps Jobs upside the head and reminds him that his greatness in negotiating is having something to freakin’ negotiate with.)
Jobs: Yeah, what Mozilla gets will work just fine with us.
To be sure, Apple could have something to offer Google for better referral rates. However, I don’t believe arguing demographics will cut it here.