#14 The Cost of Being the Default

Or How Google Pays Billions to Stay on Top

Google holds a 93% market share of the search market. The big portion of it is that it's a much better search engine, but it's also because it's the default search engine on almost all browsers. And that doesn't come for free.

When you open a Safari browser on your iPhone or MacBook and search for something, you will get results from Google. Google is the default search engine for the Safari browser which holds an 18% market share. But it's not Safari that pays Google to provide search results. It's Google that does. And they pay a hefty price. It's estimated that Google paid Apple $20 billion in 2022 to remain the default search provider. That's billion with a B.

Apple is not the only company that gets paid. Google pays Samsung $3.5 billion/year to be the default search on Samsung Internet and $400 million/year to Mozilla to be the default on Firefox.

This is known as the Traffic Acquisition Cost or TAC. Google's TAC for 2022 might have been $24 billion, but they also generated $162 billion from search ads. It makes sense for Google to spend 15% of their search revenue to remain the default search provider.

It's not just about being the best search engine. Holding a 93% market share is also about being the default.