First, Apple is building a search engine, in a non traditional sense, by providing a first level of results directly via Safari suggestions and Spotlight/Siri on client devices. That layer gives them enough ability to capture specific verticals should they find them profitable.
Second, and more subtle question, would be whether to become a full-fledged player in this space. Apple, of all tech companies, seems to care the most about the bottom line and does not go about reckless dick-measuring contests. Building search is hard, and it is questionable that Apple in the medium term would be able to profit more than it already does from Google search. At very least this would be a can of worms they open with unknown profitability. Note that to make money off of search you have to also build the ad side of things and then try to compete with Google who owns the rest of the ecosystem and has levers to undercut you. It’s even possible that the current arrangement is more favorable to Apple, as Google indirectly benefits by preserving their monopoly and may be willing to pay even more than that particular transaction should be valued independently.
Where owning the search space matters to Apple most is the option value, and Apple so far has a cheap way to do it (Microsoft had been paying the costs). In addition, Apple has been minimally boosting DuckDuckGo by giving it some free exposure for the just-in-case scenario.
My take is Tim Cook is going to watchfully wait and let this play for as long as possible while ensuring they have enough leverage to keep Google paying up, instead of pulling another Apple Maps.
Right now the focus is to take some Android marketshare mid-market and sell some services there. Once they own quite a big chunk of client devices, perhaps it will make sense to give the middle finger to Google.
P.S. all of this is especially true now that Pixel has failed to capture any meaningful share of the high end iOS market to be a real threat for Apple.
The current agreement in a way puts Apple at the mercy of Google.
DuckDuckGo (with a better name and more polish) could be an Apple product. It wouldn’t be that expensive to buy and they don’t need to put as much ads on it as Google does, they only need 30% of income to make as much as they make now.
Gotta love it when Wall Street comments on the strategy of companies they only partially understand.
In order to stop paying a third-party for search results, Apple should buy a company that mostly pays third parties for search results?
> Apple could likely buy it for under $1 billion
> a deal would be fairly easy to digest given DuckDuckGo’s small size, with fewer than 100 employees.
Exactly what kind of tech does this author think DDG has that Apple couldn't build better than DDG with 1,000 employees making a $500,000 salary for 2 years?
I love DDG, but I don't think this person really knows what it is.
Cynical part of me expects to hear about DDG raising another round in the near future. This is the type of article I'd want out there if I were looking to raise money, giving a seemingly plausible exit strategy with a valuation
> Sacconaghi estimates that Alphabet (ticker: GOOGL) pays Apple (AAPL) between $7 billion and $8 billion a year for Google to be the default search engine for iOS ...
> Google pays that large sum to Apple in part out of concern about what Microsoft (MSFT) might be willing to pay Apple to supplant Google with Bing*
Unlikely. Apple does not have search, and they simply need the best search available for their devices to stay true to being "premium".
> Sacconaghi thinks Apple should consider acquiring the No. 4 search engine (after Google, Bing, and Yahoo)—privately held DuckDuckGo. He thinks Apple could likely buy it for under $1 billion, “
This is completely off. DDG is highly unlikely to be worth that much. As discussed in this other thread - https://news.ycombinator.com/item?id=23458202, DDG is dependent on Bing both for search and ads.
> And he also writes that “If Apple attempts to acquire DuckDuckGo but is blocked by regulators, it would arguably put Apple in a worse position than ever, given that Google and Microsoft would then know Apple has no alternatives.”
This does not make much sense to me. It's not the kind of thing I see regulators going after. Happy to be schooled though.
Apple Maps really has improved, and they just rolled out a huge map tile quality improvement to get denser displays (the “closer to google” argument).
With recent quality improvements I take Apple Maps over google maps grand majority of time (well in pre-lockdown life). It took a while but I think its finally working out genuinely well now.
Analysis: "Apple can make such acquisitions for less than $1 billion. This will be less than a week of Apple’s cash flow."
Logic: None! Apple makes $1 billion a week by avoiding running a bunch of minnow services with stronger competitors. Apple should buy X is a meme that needs to die.
I think Apple doesn’t just want to direct users to some search engine, they want it to be the best search engine. The current deal, where Google pays billions for that usage, is a pretty good partnership. Every other search engine probably would be worse at making money off that traffic and thus couldn’t afford to pay as much for it, and also would give a less premium user experience. Why would Apple rock the boat?
They didn't take that approach with maps. Might not have been as lucrative, but could've been cheaper than developing their own, inferior maps solution.
They did Apple because Google orpahned their maps app on the iPhone by giving turn-by-turn navigation capabilities first to their Android app. Classic strategy tax that backfired as the most used maps app on Apple is the default app and Google has a fraction of the users on the iPhone.
Google also required user location data which Apple was not prepared to give. And Apple of course didn’t want to be in a second place position (apart from navigation there were also the better looking vector maps being reserved for Android etc).
'Buy this expensive Apple Phone you cannot own / overpriced not-professional-grade MacBook Pro, or else you have no good private search engine option.' (except for Qwant which is usable but not good)
The question is, how many would care if when they searched on their phone the results went to search.apple.com? Again, we're talking about people outside of tech.
No it’s not. No reason to buy duck duck go if you’re not going to use the name. If they want Apple branded Bing search they could just work something out with Microsoft directly.
I would agree, except for DDG's privacy stance, and the advantages Apple would have if they wanted to make that a marketing point as opposed to integrating with a third party.
I actually saw a DDG ad on the highway in my town recently (in the Midwest). I was a pretty surprised seeing this. Unfortunately, it wasn't as clear as it could have been about what it was. (My wife had no clue from the billboard what it was).
So, at least they are trying to get more users (via billboard ads).
DuckDuckGo recently launched a major billboard campaign. I first saw a billboard in the wild then saw their announcement when it was on Hacker News.
https://duckduckgo.com/billboards/
Hell no!! This would be worse than oracle taking over SUN Microsystems. I would litetally protest in front of an applestore and I have never protested before.
Leave ddg out of your empires. It's one of the few reliable and trustworthy services I use daily. I guarantee apple will just ruin it and help google dominate in the process. Thesr analysts don't get why people use ddg!
I think people who use DDG don’t get it’s mostly just bing’s search API with better branding and privacy features.
Which isn’t necessarily a bad thing, but it just makes DDG much more of a Microsoft acquisition target than an Apple one.
These so called “analysts” have no idea what they are talking about. Google pays Apple nearly $8 billion a year at this point to stay the default search on safari iOS.
Why would Apple throw away that free money to instead pay it back to Microsoft operating a business that can only be monetized by advertising?
I doubt search will ever be part of the Apple portfolio. Users won’t pay for it and Apple is not interested in becoming an ad network.
An independent DDG that's seen as an independent alternative, slightly hurts Google and provides impressions for Microsoft-managed ads is likely a lot more valuable to Microsoft than another Microsoft-owned brand that nobody will believe is actually independent and more privacy-friendly.
The source of results is irrelevant. Pagerank based revenue model and how they prioritize relevancy (e.g.: programming related query will have the top stackoveflow answer on the first page and their bangs) is why I like them in addition to their privacy promises. Ddg is still very simple,especially their /lite search. Google is cluttered and weighty but I still need it for some results. Bing results are often different than ddg for me as well.
DuckDuckGo is a Bing frontend, no? An acquisition by Apple wouldn't make sense, because they'd just be writing checks to Microsoft. In any case, I don't think the proposition is something to get upset over.
There's more to the services DDG offers than just private search via Bing. DDG has built its own technology around specific types of searches and queries. The main search product is powered by Bing, but it's not fair to say it's just "a Bing frontend".
I'm not trying to de-value the company, just explaining why I don't think an Apple acquisition makes sense. If the main search product, or even the majority of the search results, are coming from Bing...I think that makes an acquisition kind of silly. But, bookmark this for when the sale is announced in a few months!
These times prove that people do not go out to protest only the thing that is most worthy of protest, since whatever that thing is, it is not seeing significantly more protestors than other things that are also important.
And that's OK. It's good if things that are important, but not quite most important, have people working to improve them as well.
I don't know how Apple can think they will remain competitive with Siri without building a search engine.
However, Apple are really bad at executing on cloud services of any kind. With any amount of resources there are certain things that company just cannot get right, and search is definitely one of them. I would love to know what it is organizationally that makes them so terrible at web apps and cloud services.
I think apple has quite a strong reliance on using their own tools and frameworks, which is fine for macOS and iOS as they are both mature, but on web they don't really have anything. The app store still seems to be running on webobjects (at least from URL structure), which hasn't been updated much in the past 10 years.
Apple doesn't have to own a search engine to use one in Siri. They could pay Google/Bing/DuckDuckGo to provide an API. Companies don't need to merge into one big monopoly to have synergy with each other.
Speech Recognition is something I would be more concerned about. Amazon and Google with a decidedly more “liberal” stance on data collection have more raw material to train and validate models on.
The article suggests that Apple should buy DuckDuckGo, a much smaller player than the top-3 (Google, Bing, Yahoo) for fear of being "uncomfortably dependent on Bing". First, if Apple wanted a search engine, they could have acquired Yahoo for ~4BN a few years back when it went up for sale. Second, as has been mentioned multiple times, DDG's organic search results come from Bing.
Yahoo isn't a search engine and hasn't been for years. Just check the "Powered by Bing™" at the bottom of every search result. That leaves just two search engines, Google and Bing. Not counting non-US search engines that may have significant market share in their respective countries.
In the years before the acquisition by Verizon, while Marissa Mayer was still CEO, Yahoo had rebooted its own search engine, an effort that was abandoned shortly before the sale. At that time, Apple could have very well acquired a formidable search engine if they wanted to.
It used to be that "Apple should buy Netflix" for several years, on and off. Now this. Analysts have always misunderstood Apple, what it focuses on and what it will not do. They come up with meaningless recommendations that Apple will not even spare time for an elevator pitch.
Wherever Apple sees any deficiencies, it works by secrecy, non-acceptance (or denial, like "you're holding it wrong", depending on the case) and creating its own way out of it without any or barely any acknowledgment of deficiencies (or wrong doing, as the case may be).
I personally believe that, more than having a search engine, Apple would be better off with an online maps solution (including navigation) that anybody could use, regardless of their hardware and OS. It has already opened up it's iWork suite on the cloud for everyone with a browser. Would Apple consider such a move with maps (though it's a very weak competitor in most countries outside the US)? I don't think so.
Also DuckDuckGo is nowhere close to Google's results for many intents and purposes (I know anecdotally many people find it extremely useful). Apple buying it would be a dead investment not just for this reason, but also because Apple doesn't really know how to manage and run certain online services well
In the last week I've heard multiple ads for DDG during podcasts about business and startups, saw an article today on HN about how DDG is better than Google on privacy, the same article again with a different title about mobile choice, and now this article about an analyst who thinks Apple should buy DDG.
If I didn't know better, I would think DDG is trying to get bought...
A bit off topic: try Qwant[0]. I was a user of DDG for a few years but I made the switch some months ago and didn't look back: search results are way better. AFAIK is a European company (if that is relevant to you). I'm not affiliated with it in any way, just an happy user.
In truth, Apple already bought a search engine when they acquired Topsy. The engineers from Topsy now work on the search tech that powers all sorts of things at Apple.
That being said, DDG would be interesting as an acquisition for Apple because it would be consistent with Apple’s privacy-first approach to service design.
If that's all DDG are doing it would be simple for Apple to replicate, no? Do Bing charge for this? If not could they legally enforce such charges?
What aren't there more DDGs around?
You value your privacy but blindly trust DuckDuckGo?
They say they store all your searches in their privacy policy (but "not in a personally identifiable way" they claim). They also say they effectively rewrite your search results to insert affiliate tracking.
Even if their entire stack was opensource and you had strong visibility and guarantees regarding the code they're actually running in production, adversaries could be exploiting DuckDuckGo and recording all the information you send to them "in a personally identifiable way". So, basically, don't trust DuckDuckGo. They're yet another for-profit middleman (maybe parasitic, maybe not, we don't know) that, through its centralized information accumulation, enables the sort of behavior you claim you want to avoid.
I feel like every year an analyst says Apple should buy something:
- Apple should by netflix and get into the streaming game(considering how much appleTV stinks this may be a good idea!)
- Apple should buy Disney, there is the synergy of two trusted brands in the entertainment/media space(Steve Jobs did own Pixar which Disney now owns)
- Apple should buy twitter, they can expand their news and reach a large connected audience.
Things I think Apple should do:
Buy a large email provider, they had a yearly $100 a year email subscription service but that was a flop, make it free and make it iOS exclusive(as an alternative to gmail).
Buy Spotify, given they have iTunes getting spotify would make sense, perhaps antitrust issues with this one.
Netflix makes the most sense. Definitely made the most sense in hindsight or bullish on Netflix. Buying it for $100B or so would’ve been great. Apple would’ve been in an insanely strong position right now with whatever combined thing they’d come out with. For the sake of a competitive market, I’m happy it didn’t happen. I much prefer Netflix not being owned by a bigger company.
I don’t get Spotify. Spotify would cost $40B+ to buy after the premium they’d have to offer. Apple Music keeps growing its user base.
Not sure if it would be allowed by regulators. There’s still Rhapsody in the west for music. Beyond that I don’t think any streaming service survived.
Again for the sake of competitiveness I wouldn’t want this to happen. I still miss Rdio’s design. Along with other things I don’t think Spotify or Apple Music really improved on since the Rdio, MOG, Zune music (forgot the name now) days, early Spotify, Rhapsody/Napster days.
Netflix would have made more sense certainly but I suspect they would have "pruded" it to death given their failed attempts and interference with Apple TV over things which may offend utterly irrelevant demographics.
Even if independent a company would have been a good investment doesn't mean that they would leave the damn thing alone and not ruin it in practice.
They are an email provider. And it's already exclusive. You need a Mac/iOS device to get an icloud email address.
iTunes/Apple Music is incredibly healthy and the only reason to buy Spotify is to extinguish the biggest competition they have. There is no other benefit to them and it's a bad look aside from any potential legal issues.
Things I think Apple should do:
Something that other people aren't doing.
Extensively and seriously overhaul or eliminate their traditional computing business. (They are poised to do this and may very well in the coming years with their ARM on Mac strategy). I realize that the new Mac Pro is marketed to a very specific set of people but my latest iPhone cost significantly less than the wheels they will sell you for the Mac Pro. It makes no sense.
If Apple acquires a search engine, that engine will instantly lose most of its value. People do not want to use a search engine that appears to be a side-project.
What Apple should do, along with others in the industry, is jointly create and fund a new search engine, based on non-commercial principles.
I'll quote an old HN comment:
> I don’t understand why Google’s competitors don’t form an
> independent search engine. If I were Microsoft, I’d talk to
> Apple and others to see if they would help fund a spun off Bing.
>
> The internet badly needs a big alternative search engine that
> isn’t beholden to advertisers or dependent on a single
> corporate owner.
>
> The benefit of such a search engine (whose main incentive is to
> just be a good search engine) is obvious for the public, but
> would also give companies who rely on their own OS, leverage
> against Google.
The only reason would be the goodwill/value of the brand, but I can't imagine a company with the design and marketing chops of Apple running a service named "Duck Duck Go".
The issue with suggesting buying Duck Duck Go is that they’re reliant on Microsoft/Bing for results. That would mean Apple coming to a deal with Microsoft for search access where Apple runA the ads business.
If you think you can make $20B on ads and Microsoft charges you $15B for search access on that scale, why not just let Google pay you $7B and make more money?
It’s possible that Microsoft would charge less or that Apple could make more, but buying DDG doesn’t get them unlimited access to Bing’s results for one low price. I’m not implying that DDG doesn’t have any technology, but they are reliant on Microsoft for the hardest parts and there’s no guarantee that Microsoft would grant Apple as favorable terms when it’s not just a niche project, but a major competitor’s new foray.
It could be, but apple maps and its 1B dollar update may prove otherwise, I feel like this was one update that really was worth it for Apple, the new maps update is excellent and I no longer use google maps. Siri on the other hand...
I am actually doing an experiment of using DuckDuckGo as my exclusive search engine across all my devices for the last two weeks. The experience has been suboptimal and much of it is on the UX side followed by the lack of search engine features.
As a part of this experiment, I also used Bing for two weeks before this and after a few days I could not notice that much of a difference to Google (one thing that annoyed me was Youtube videos playing inline on Bing).
But DDG is simply painful to use as much as I want to like it. I can not imagine it meeting Apple's product standards or having an Apple logo on what is the current DDG product. I also can not think of any IP that DDG has that would be interesting for Apple to own.
Apple has already been crawling the web in some capacity for its Siri Website Suggestion feature. There are obviously some hurdles to take, so there's nothing that says they couldn't create their own search engine.
The whole article is bereft of any reasonable logic as to why it makes sense for Apple to buy DDG.
The article does mention an important detail that the so-called analyst fails to properly account for: from Google’s perspective, its opportunity cost—the amount of revenue it stands to lose if the deal were to be renegotiated adversely—is at least $25B. Google therefore has every incentive to maintain the status quo, or at least be allowed to offer to pay more than $8B to remain the default option on iOS.
Frankly, much of Apple’s search technology over the years has been terrible so (assuming it’s a competency issue) they should at least consider buying something better. The App Store certainly can’t find things well...I suspect that is “by design” though. Long ago I had to replace Spotlight with Alfred to get good performance on the desktop.
Apple isn’t an ad company, I can’t imagine they’d make a significant amount of money releasing a general search engine just to have one.
Well, Analysts are doing their job; they did also say Apple should get Twitter as well.
As with twitter, I don't see much merit with this argument; Which goes like "If Apple decides to give away it's revenue stream from X, decides to go with Y which provides inferior service, if Y decides to shut its shop, So Apple should buy Z which doesn't generate as much revenue as X or Y"!
An ad-tech company now owns a majority interest in Startpage.
Same old story. We will take money from the ad industry to protect users from the ad industry. Brilliant!
Maybe creating privacy-oriented search engines is actually a profitable venture as it seems inevitable someone on the opoposing side will eventually buy you out.
These online ad investors are so aggressive I expect Pi-Hole will one day be a target.
True, and that is why I mention it as an example. I believe these online ad industry people will try anything, even something that appears futile to you and I. Last I checked, Pi-Hole does own a trademark application. Presumably whomever acquired it could use this against a fork that tried to use the name.
It already has a trillion dollars, it doesn't have to worry about trivial bullshit like cost-cutting. Wall street types don't really understand product building ... the math is more like, if you increase water in cola, you can increase profits by 20%.
> DuckDuckGo has been a profitable company since 2014 without storing or sharing any personal information on people using our search engine.
and
> As mentioned, DuckDuckGo is profitable based mostly on keyword-based search ads, though we have always been on the search for other ways to anonymously make money so that we can reduce the dependence on advertising.
It's a stupid why. Currently they get $8 billion for nothing.
Purchase DDG (and set default) and they lose $8 billion, users complain about worse search results (just like maps) and Google just puts a banner on their homepage saying here's how to change search engine and gets the search traffic for free.
Just because apple makes plenty of money doesn't mean they should buy every random startup.
It doesn't really explain why buying a product that's primarily backed by Bings search index (at least for western customers) is better than making a deal with Microsoft directly for Bing access.
The qualifications for being an "analyst" are about one-millionth of those required to decide whether Apple should buy a search engine. This commentary is like me telling Lebron James what strategies to use in the upcoming basketball season.
Are you saying that corporate development is harder than being an equity analyst? Not that it means all that much, but an equity analyst is considered to be a more prestigious (and harder to land) position than a corporate development job.
First, Apple is building a search engine, in a non traditional sense, by providing a first level of results directly via Safari suggestions and Spotlight/Siri on client devices. That layer gives them enough ability to capture specific verticals should they find them profitable.
Second, and more subtle question, would be whether to become a full-fledged player in this space. Apple, of all tech companies, seems to care the most about the bottom line and does not go about reckless dick-measuring contests. Building search is hard, and it is questionable that Apple in the medium term would be able to profit more than it already does from Google search. At very least this would be a can of worms they open with unknown profitability. Note that to make money off of search you have to also build the ad side of things and then try to compete with Google who owns the rest of the ecosystem and has levers to undercut you. It’s even possible that the current arrangement is more favorable to Apple, as Google indirectly benefits by preserving their monopoly and may be willing to pay even more than that particular transaction should be valued independently.
Where owning the search space matters to Apple most is the option value, and Apple so far has a cheap way to do it (Microsoft had been paying the costs). In addition, Apple has been minimally boosting DuckDuckGo by giving it some free exposure for the just-in-case scenario.
My take is Tim Cook is going to watchfully wait and let this play for as long as possible while ensuring they have enough leverage to keep Google paying up, instead of pulling another Apple Maps.
Right now the focus is to take some Android marketshare mid-market and sell some services there. Once they own quite a big chunk of client devices, perhaps it will make sense to give the middle finger to Google.
P.S. all of this is especially true now that Pixel has failed to capture any meaningful share of the high end iOS market to be a real threat for Apple.