Comment: Can Apple’s Supposed Search Engine Compete with Google?

CAMBRIDGE, England: Small corners of the internet are on fire with news that Apple has dramatically ramped up its search engine activity.

Search bots usually scan websites in order to rank and index them for search engine results. When you search for something on a search engine, the results that appear are ordered by “ranking”, which means that the most specific result for what you are looking for appears at the top.

This increase in activity also appears alongside pressure from the UK Competition Commission to sever Apple’s cherished multibillion-dollar deal with Google.

The deal ensures that Google is the default search engine for Apple’s iOS devices. Many now predict that Apple is on track to launch its own search engine soon.

READ: Apple is developing search engine to compete with Google: report

Apple’s entry into the search engine market comes 11 years after the debut of Microsoft Bing, Google’s only other notable competitor to date.

Bing is by no means a success, despite what Microsoft’s public relations team claims, and it continues to pale in terms of economic performance and market power compared to Google’s ubiquitous search platform.

In fact, every academic year my colleague Dr Kamal Munir and I teach a Bing case at the Cambridge MBA as an edifying account of what happens if you choose to go head-on against well-established platforms. .

Unlike Microsoft’s Bing, however, Apple’s aperture gambit is quite different and will likely produce a better result.

RESET THE RULES OF ENGAGEMENT

One of the biggest mistakes Microsoft made with launching Bing was to follow the same ad-based business model that Google used. In this business model, search users type in what they are looking for, and based on this, the search engine also displays relevant ads that may be of interest to them.

For such a business to be profitable, it takes a very large number of users who are searching, as well as a large number of advertisers willing to sell to them, as well as millions of websites scanned by the previously mentioned search bots. .

All three are necessary to display useful search results to the user and bring the right customer to the advertiser.

READ: Commentary: Apple is ahead of iPhone 12. This can be a problem

In between, Google gets paid to match the right ads with the right users. The more research, the more useful the results.

The more useful the results, the better the ad targeting. Bing struggled to start this virtuous cycle and never quite reached the scale that Google enjoys with its search offering.

Apple’s search engine will have a different future if the rumors about its business model are true. Recently, it has focused heavily on user privacy, including, but not limited to, publicly refusing to give the FBI secret access to its devices.

It will be very much in line with this “privacy first” stance that Apple chooses not to make money from advertising, which involves exposing customer usage data to third parties.

READ: Commentary: When our insatiable appetite for data can hurt the environment too

Instead, it could simply sell more of its highly profitable devices and subscriptions to privacy-conscious customers. By not following in Google’s footsteps, Apple does not have to engage with the search giant on its terms.

THE BEST PRODUCT FALLACY

When Bing first launched, it had features that Google didn’t have back then. This included a “flyby” of the research results as well as specialization of all kinds in travel, shopping, local business and health research.

In terms of the quality of search results, Microsoft has claimed similar or better output than Google. Despite its apparent product superiority, Bing has never won the search engine war.

This aspect of search engine history works in favor of Apple, which does not need to differentiate itself from Google. In fact, Apple’s search results have to be “just good enough” to be adopted en masse by its users.

We can see this with the results of Apple Maps, which was launched in 2012. Despite a difficult public launch thanks to its poor geographic coverage, Apple Maps has gained a dominant 60% market share among iPhone users in the past. UK in just under a year of launch.

The same goes for Apple Music, which has emerged as the second-largest player in streaming music despite a nine-year lead by Spotify.

DISRUPTIVE SIDE EFFECTS

With its latest iOS 14 update, Apple has already started trading Google search results for its own. Most iOS users barely noticed the change for all of the reasons given above.

But this silent exchange does not come without its own challenges. By defaulting to its search engine instead of Google on its devices, Apple will open up to monopoly criticism of competition commissions in a variety of markets.

READ: Comment: Is this the end of Google as we know it?

It is also likely to disrupt the advertising industry which could lose its reach to Apple customers. Apple’s customer base is highly coveted with its above-average purchasing power, and by making it easier for users to avoid search ads, Apple may well create a tectonic shift in the advertising industry in his outfit.

Google’s dominance of internet search won’t end with Apple’s entry into the foray, but it would certainly weaken in the face of growing consumer preference for privacy.

Given that Google’s business model differs significantly from Apple’s, it’s likely the search giant would have to learn to live uncomfortably with its rival’s search engine instead of pivoting to compete head-on.

Hamza Mudassir is Visiting Fellow in Strategy at Cambridge Judge Business School. This comment first appeared in The Conversation.