Why Does Google Pay Apple $1 Billion a Year?

Apparently, Google has to do what Google has to do if it wants to retain 95% of the mobile search market.

Despite being at odds – or at war – in mobile with their competing mobile operating systems, Google pays Apple a reported $1 billion a year.

But why?

According to a new report from Morgan Stanley analyst Scott Devitt, it’s all about doing big business. Apple is said to collect approximately $1 billion per year from Google in order to keep Google the search default on iOS devices.

In the past, some analysts have estimated that Apple has a revenue sharing deal with Google on iOS search. So that for every one dollar of search advertising collected on an iOS gadget, Apple gets 75 cents.

According to a summary of the report from Business Insider, Devitt thinks Apple wouldn’t do a revenue sharing deal with Google “because it’s too messy.”

“He thinks Apple would do a fee per device because it’s easier for accounting and it gives Apple upfront payments,” BI suspects. “It’s also a hedge against users going to Google.com and searching from there instead of the default search box on iOS.”