Is Marissa Mayer about to play two of Silicon Valley’s fiercest rivals off each other?
Kara Swisher of Re/Code was out with a fascinating scoop on Yahoo late yesterday. According to her report, which cited sources inside the company, Yahoo is looking to convince Apple to dump Google as the default search engine for iOS devices like the iPhone. Marissa Mayer is personally spearheading the effort, and “has already buttonholed a few Apple executives on the topic, including its powerful SVP of design, Jony Ive” the report says.
Morgan Stanley has previously estimated that Google pays Apple $1 billion a year in commissions so that it is the default search engine for iOS devices. This looks like money well spent, because it has also been reported that Google makes more money from search on iOS devices than it does from Android devices. (While there are more Android phones, there’s evidence that iOS devices still account for more internet traffic). In other words, Apple is allowing its rival Google to profit from being the default search engine for Apple’s mobile and tablet products.
If Mayer is able to pull such a move off —and there is already skepticism—it would be a massive coup for Yahoo, which has been struggling to compete with Google in search for years. She would presumably need to offer more generous commissions than Google does to get a deal across the line. But cash shouldn’t be a problem for Yahoo: it is poised to reap a multi-billion-dollar windfall from Alibaba’s $100 billion-plus IPO in coming months. Yahoo owns 24% of the Chinese e-commerce giant and will sell 40% of its stake into the offering.
An even bigger challenge for Mayer might be convincing Apple—notoriously obsessed with the user experience—that Yahoo’s mobile search technology is up to scratch. In its favor is the fact that the company’s stocks and weather apps are already the default option on the iPhone. Quartz has placed a request for comment from Yahoo.
Despite many overlapping ties, relations between Apple and Google haven’t always been cordial over the years. If Mayer—herself an ex-Googler—were able to successfully exploit that tension, it might be a strategic masterstroke that gets her company back into the search business in mobile, arguably its highest-growth platform.