Print 21 comment(s) - last by Tony Swash.. on Mar 15 at 2:56 PM

The FTC has subpoenaed Apple looking for documents that contain agreements between Apple and Google regarding Apple's mobile devices using Google services

Apple was recently subpoenaed by the U.S. Federal Trade Commission for information on its use of the Google search engine as the default on iPhones and iPads.

Apple and Google have a bit of a strange relationship. The two shared board members over the last decade, including Eric Schmidt. They were connected this way for a period of time until Google developed the Android mobile operating system to compete with the iPhone.

The FTC began investigating the sharing of board members in 2009 and whether it violated antitrust laws, and Schmidt ended up leaving the board that same year. From there, rivalry between the two has heightened due to Apple launching lawsuits against phone makers like Samsung, HTC and Motorola, who run Android on their phones.

Just last year, the FTC started investigating Google in an effort to find whether the company increases advertising rates for competitors unfairly and ranks search results to benefit its own businesses. Now, the FTC is pulling Apple into the equation regarding its default settings, which includes the Google search engine.

Apple has had Google as the default search setting since the iPhone launched in 2007 and since the iPad originally released in 2010. Google Maps is also used on both of these devices over any other map service.

The FTC is also curious as to whether Google is purposely stifling competition by partnering with Apple to keep Android and iOS in the top ranks of the mobile realm.

The FTC has subpoenaed Apple looking for documents that contain agreements between Apple and Google regarding Apple's mobile devices using Google services. It hopes to uncover details regarding their relationship and whether Google is using Apple's devices to crush competition unfairly.

"As mobile search gets more widespread, the default setting becomes more significant," said Allen Grunes, an antitrust lawyer at Brownstein Hyatt Farber Schreck LLP.

According to comScore, an Internet market research firm, Google took the top spot in Internet search in February 2012 with 66.4 percent of the market. By the end of last year, Apple had sold 183 million iPhones and 55 million iPads. The two coming together could surely take over the market, as they already have to an extent.

Source: Bloomberg

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RE: Not quite accurate
By Tony Swash on 3/15/2012 8:17:42 AM , Rating: 0
Glad you know so much more about Google than I do. But I think you are wrong. Look again at the two purposes for Android I stated. Also, I think a run-rate of $1 billion is not a failure. The trend was towards *very* rapid increase. There are also many other sources of revenue (app sales, payments, ...). Android is a strategic platform for Google, and it is only a few years old. As far as I can see, you armchair CEOs have no clue whatsoever. Google can think very long term, because their revenue stream allows them to. But Android is already a success, and growing into a bigger one. Admittedly, Apple is more successful in this area, due to superb products and execution. They may continue to succeed, or they may not. Things change very rapidly in this industry. But calling Android a failure at this stage is just dumb.

The thing about Google is that it only has had one great money making idea, selling targeted advertising based on collecting user data primarily from search. That one great business idea has been a very, very successful one for a long time but it is nearly 15 years old. Since that one great idea that built Google everything Google has done has failed to make any money. Everything. Google have given away a lot of cool stuff. Great - I lapped it up. But giving stuff away is not in itself a business strategy. Giving stuff away has to be tied to a monetization strategy at some point, and Google has not yet come up with any successful monetization strategies beyond it's original and very old browser search/ad product.

There are two options facing Google. One is to just continue making money from it's old desktop based browser based advertising product. The problem with that strategy is that all the dynamic new trends in technology (internet via apps, internet via mobile devices, walled gardens of curated internet experience like Facebook, iTunes etc, the eclipse of search and search ads by social search and social ads) are slowly but surely making the old Google product less and less relevant.

So Google knows it has no option but to diversify into new products and areas that are growing. Hence the intensity of the Google+ push, hence the intensity of the Android push. The problem is that Google is just not making any money with those new initiatives. In fact in mobile no one is making much money from advertising in general and that's bad news for a company dependent on advertising.

Like Microsoft, Google is a company that's old business model is threatened by the rise of the mobile web, of mobile devices and by the social networks, both companies are still very big and very profitable but they both know that they are beginning to skate on thin ice. Both companies need to transition their business and products to the new paradigms, both are trying very hard and both have not yet succeeded.

"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng's take on patent troll Soverain

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