Google has become the defacto search engine for the internet for most people around the world. Along with this, Google also provides a free email service, free cloud storage, a news platform, shopping comparison service and so much more. No matter how good your online services are though, it can sometimes cost money to stay on top, and apparently, it costs the company a good chunk too. Over the last year, the company has spent $19 billion on contracts similar to that with Apple in an attempt to make people aware of Google's services and keep using them.
When Apple launched iOS back in 2007, they used Google as the default search engine thanks to an agreement between the two companies. This worked well for both parties for a while, but Google eventually backed away. This resulted in Bing being the default search engine for iOS devices. We saw the same thing happen when the company stopped paying Mozilla to make its search engine the default on their Firefox web browser.
These sorts of agreements are formed and dissipate constantly but for the most part, it seems to do well for the Mountain View tech giant. In a new report from Bloomberg, it looks like Google has paid $19 Billion to acquire traffic throughout these last 12 months. This happens through all sorts of mediums and close to $7.2 billion went to Android OEM partners for ensuring Google's search box is front and center on partner devices, and to ensure its apps such as YouTube and Chrome are included in smartphones and tablets.
So over the last 12 months, Google has paid out $7.2 billion to these OEMs so that these applications are included on those devices. Interestingly, this amount is three times higher than what the company paid out to OEMs back in 2012, and this does make sense. Competition is heating up and every day more devices are being activated than the day before. The market is growing and the company is doing what it can to leverage the mobile platform. This also lends a different perspective to Google's increased focus on hardware, as a higher market share in Android will ultimately help cut down on this traffic acquisition cost.
Source: Bloomberg
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