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 2:56:08 PM , Rating: 2
That's JUST the direct profits of the mobile division. Are you thick or something? What I'm saying is that Android increases the overall use of Google's services, thus increases their profits.

How? Given that the only way that Google makes any money is through advertising how much revenue does Google earn on mobile advertising. The best figure I have seem, straight from the horses mouth, is Larry Page's number of $2.5 billion. How much of that comes from Android? We don't know for sure but if iOS search is two thirds of Google's mobile search a guess of a third of that 2.5 is reasonable.

There is zero evidence that Google makes any money from anything else other than advertising in mobile, just like as with the desktop/browser market, and lots of evidence that Google's income from mobile advertising (just like everyone else's) is small.

If Google has to play the long game, so what? Android will eventually be a $10+ billion dollar generator.

So assuming that somehow Google can pump up income from mobile to four times what it is now it will contribute about 25% of Google's income. At best. Based on track record two thirds of that will be coming from iOS and that will decline as Apple starts shutting out Google (revenge is a dish best served cold). What happens if the growth of mobile leads to a secular decline in the old desktop/browser ad market?

Nice try, but Android is clearly profitable.

No it isn't and there isn't a shred of evidence that it is. Remember Google spent over $10 billion on buying Motorola alone in order to shore up it's Android strategy.

"Well, we didn't have anyone in line that got shot waiting for our system." -- Nintendo of America Vice President Perrin Kaplan

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