The New York Times has a big piece describing Google’s “shock” and “panic” when Samsung recently floated the idea of switching its smartphones from Google Search to Bing. After years of being the butt of jokes, Bing is seen as an increasing threat to Google thanks to Microsoft’s deal with OpenAI and the integration of the red-hot ChatGPT generative AI. According to the report, one of the largest manufacturers of Android is now threatening to pull its new phones away from Google Search.
Of course, preinstalled search deals are more about cash than quality. Google pays billions each year to be the default search engine for popular products with deals framed as “share revenue” or “cost of acquiring traffic.” Google reportedly pays a whopping $3.5 billion a year to be the default search on Samsung phones, while it pays Apple $20 billion a year to be the default search on iOS and macOS. The report notes that the search contract between Samsung and Google is under negotiation and that Samsung could stay with Google.
This whole situation could just be a bargaining tactic from Samsung. Google has a semi-credible search threat for the first time in years, and Samsung could use that to push Google to a higher revenue share. It’s not clear if Microsoft is even willing to play ball here. Microsoft probably pays big for Bing’s ChatGPT integration – would it be willing to match Google’s multi-billion dollar payments? Samsung and Microsoft have an existing pre-install deal, to the point where there’s usually an entire “Microsoft” folder pre-installed on the Start screen, with apps like Office, OneDrive, LinkedIn, and Outlook.
If Samsung switched to Bing, it wouldn’t be the first time. In 2010, some models of the Galaxy S II came with Bing as the only search engine, and it wasn’t easy to get back to Google. At the time, Bing was new and ambitious, trying to beat Google’s market share, but after years of failing to gain traction, it feels like that ship has sailed at Microsoft. Recently, as Bing took the ChatGPT hype to 100 million daily users, Microsoft VP Yusuf Mehdi said, “We are fully aware that we remain a small, low-single-digit share player. That said, it feels good to be on the dance party!” That sounds like a company content with a distant second place, not one that has the budget and guts to rival Google Search.
