US Subpoenas Apple For Details About Default iOS Google Search Deal

The US FTC has subpoenaed Apple to provide documentation and information about Google’s presence on iOS as the default search engine. According to Bloomberg the FTC is also seeking similar information from handset makers and carriers. This arises in the context of the US government’s broad anti-trust investigation of Google.

These “default search” deals are common and Microsoft has done many of them. Like Spain and Portugal dividing up the “non-Christian world” in 1494 with the Treaty of Tordesillas, default search deals on PCs, browsers and mobile devices are essentially divided up between Microsoft and Google. Late last year Google agreed to pay Mozilla $300 million annually to remain the default search provided on the Firefox browser.

According to a client note put out last week by Macquarie Capital, the firm estimated that in 2011 Google made just over $1.3 billion in paid search revenue from its default position on iOS devices. However Macquarie says that Google paid $1 billion of that back to Apple as part of the agreement between the two companies.

Google has roughly 95 percent of the browser-based mobile search market. It said last year that it was seeing a mobile advertising revenue “run rate” of $2.5 billion. However that may grow to more than $4-$5 billion this year.

If $1.3 billion of that $2.5 billion (some of which is mobile display) is coming from iOS devices it would mean the Apple default search relationship is quite strategic and important to the health of Google’s mobile ad revenues.

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