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Microsoft’s Multi-Billion Dollar Apple Deal to Challenge Google Exposed

 |  September 29, 2023
In a dramatic revelation during the ongoing antitrust trial against Alphabet Inc., a Microsoft executive testified on Thursday that the tech giant had considered investing multiple billions of dollars in a deal with Apple Inc. back in 2016. The agreement would have made Microsoft’s Bing search engine the default option on Apple’s Safari browser, as part of an effort to challenge Alphabet’s Google, the dominant player in the search engine industry, reported Bloomberg.

Jon Tinter, Vice President of Business Development at Microsoft, took the stand during the U.S. Justice Department’s antitrust trial in Washington, shedding light on the secret negotiations between Microsoft and Apple.

According to Tinter, Microsoft CEO Satya Nadella engaged in talks with Apple’s CEO Tim Cook as they explored the possibility of this groundbreaking partnership.

The proposed deal would have required Microsoft to absorb a substantial financial loss due to the terms negotiated with Apple. However, Microsoft believed that it was a strategic move that would ultimately benefit Bing by increasing its market share and revenue.

Related: Google Says Microsoft Engaging In Anti-Competitive Cloud Practices

This investment would have marked a significant departure from Microsoft’s previous collaboration with Apple, which had only included the use of Bing in Siri and Spotlight from 2013 to 2017.

The core of this potential partnership revolved around the revenue generated from ads linked to user queries, a common practice in search engine deals. Given that Bing was considerably smaller than Google at the time, Microsoft would have had to offer Apple a more substantial share of the revenue than Google typically provided.

Tinter also revealed that Microsoft executives had contemplated how to explain the terms of the deal to shareholders, recognizing its potentially adverse financial impact. Nevertheless, the company saw this as a strategic move to bolster Bing’s presence in the search engine market.

In 2018, Microsoft and Apple revisited discussions about collaborating on search services outside the United States. Microsoft had even developed a detailed “playbook” outlining the investments it would make to enhance its search capabilities, aiming to instill confidence in Apple about making the switch from Google.

The revelation of these behind-the-scenes negotiations between tech giants Microsoft and Apple provides a rare glimpse into the high-stakes competition within the technology industry and the lengths companies are willing to go to challenge the dominance of industry leaders like Google.

Source: Bloomberg