The New York Times highlights the turmoil at Google as Samsung considers a new search competitor.
A substantial feature in The New York Times describes Google’s “astonishment” and “turmoil” following Samsung’s recent suggestion of shifting its smartphones from Google Search to Bing. Long regarded as a joke, Bing has emerged as a potential challenge to Google due to Microsoft’s partnership with OpenAI and the incorporation of the increasingly popular ChatGPT generative AI. Now, the report claims that one of Android’s major manufacturers is considering moving away from Google Search for its new devices.
Naturally, preinstalled search deals are more about money than performance. Google spends billions each year to secure its position as the default search engine on popular products, using arrangements described as either “revenue sharing” or “traffic acquisition fees.” Google allegedly pays up to $3.5 billion annually to be the default search on Samsung phones and $20 billion yearly to be the default search on iOS and macOS. The report indicates that the Samsung/Google search contract “is being negotiated, and Samsung may choose to stay with Google.”
The entire situation could simply be a bargaining ploy by Samsung. With Google facing a somewhat credible search competitor for the first time in years, Samsung might leverage this to negotiate a larger share of the revenue. Whether Microsoft is prepared to participate remains unclear. As Microsoft likely spends a significant amount for ChatGPT integration with Bing, would it also match Google’s multi-billion-dollar payments? Samsung and Microsoft already have a preexisting preinstall agreement, which includes a “Microsoft” folder on the home screen containing apps like Office, OneDrive, LinkedIn, and Outlook.
If Samsung were to switch to Bing, it wouldn’t be unprecedented. In 2010, some Galaxy S II models were released with Bing as the only search engine, making it difficult to revert to Google. At that time, Bing was in its early stages and aimed to surpass Google’s market share, but after years of stagnation, it seems Microsoft has shifted focus. Recently, Bing’s ChatGPT-fueled surge to 100 million daily users prompted Microsoft VP Yusuf Mehdi to state, “We are fully aware we remain a small, low, single-digit share player. That said, it feels good to be at the dance!” This statement suggests a company satisfied with distant second place, rather than one possessing the budget and boldness required to truly challenge Google Search.
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