Is Yahoo angling to replace Google on Apple devices?
Google is the default search engine on Apple's Safari browser for iPhones and iPads. Yahoo CEO Marissa Mayer is trying to change that.
We know this much: Since taking the helm as Yahoo's chief executive, Marissa Mayer has tried to bolster the company's efforts in search, but a report published Wednesday by Recode suggests that her ambitions are even bigger.
Mayer and Yahoo mobile chief Adam Cahan are reportedly spearheading the effort to make Yahoo search the first option on Apple's Safari browser, pitching the company on a mobile search engine that Yahoo reportedly has in the works. Yahoo's plan is apparently far along, with detailed decks and images of what the product would look like. While Yahoo has yet to make the presentation, Mayer has already made the idea known to Apple design chief Jony Ive, one of the most powerful executives at Apple.
Spokespersons for Yahoo and Google declined to comment. Apple did not return a request for comment.
Of the Silicon Valley tech giants, Yahoo is behind in generating money from mobile revenue. Last quarter, Mayer said on a conference call with analysts that the company's mobile advertising revenue were "not material." By contrast, Facebook makes 53 percent of its advertising revenue on mobile. And Google's search partnership with Apple on iOS devices is very lucrative for Apple, raking in upwards of $1 billion in fees annually, according to Recode.
The report comes one day after Yahoo announced first quarter earnings for 2014. While the company made small gains in key metrics -- sales in display advertising went up 2 percent -- Yahoo's core business remains sluggish, so a looking to revenue channels on mobile has been a top priority for the company.
Apple already partners with Yahoo in mobile: the iOS weather app pulls data from Yahoo Weather, and Apple's stocks app pulls from Yahoo Finance. And Yahoo has internally discussed having a greater search presence on iOS devices for at least a year, according to the Wall Street Journal.
But while, strategically, a tie up with Yahoo might make sense for Apple, the risks are great. Apple has been trying to rid itself of dependence on Google's products, especially as the two companies' rivalry continues the escalate. (Apple is in a major legal spat with handset maker Samsung over alleged patent infringement -- a case where Google has played a central role, as many developers for Google's Android operating system have taken the stand.)
That rift is the reason Apple ditched Google's popular Maps product in favor of building its own service in-house. But that move proved initially disastrous for Apple, whose own mapping app was released to widely unfavorable reviews from consumers. Soon after, Tim Cook issued an apology to users.
Granted, forging a default search partnership with Yahoo -- which already has a presence on iOS devices, just not as the first choice -- is different from building a whole service from scratch. Still, those bad memories should weigh on Apple's decision process, said Chuck Jones, founder of Sand Hill Insights, a technology research firm. "They will probably be more gun shy over it," he said.
Another issue is not only looking at whether Yahoo will be able to make its technology up to par with Google's in the near future, but if Yahoo has the resources to continually improve on it and innovate to make it better in coming years. "Google has all those resources," Jones said.
Yahoo aside, one other side effect could be a better contract deal for either Apple or Google, said Jones. Either side could try to use Yahoo's bidding as leverage. For Apple, its threatening to downgrade Google's search presence on iPhones and iPads. For Google, it's reminding Apple that going with an unknown entity could leave the company vulnerable to another Maps fiasco. "Each side could try to sweeten the pot," said Jones.