Why replacing Google with Bing on Apple devices will affect Google

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Bing’s presence on Apple devices would help it gain search market share

In the previous part of this series, we discussed the motivation behind Apple’s (AAPL) move to replace Google (GOOG) search with Microsoft’s (MSFT) Bing for the redesigned Spotlight search feature for the upcoming iOS 8 and OS X Yosemite. Here, we’ll analyze what this action means for Microsoft and Google. This is no doubt good news for Bing, which is still a distant second to Google in the U.S. core search market. As the chart below shows and as reported by Comscore, after Google and Bing, Yahoo (YHOO), Ask Network, and AOL (AOL) take up the remaining three spots. Bing has managed to increase its market share from 16.9% in March 2013 to 18.6% in March 2014, and its presence on Apple devices would help it gain further market share.

Search Market Share US

Apple’s move could make Google lose search advertising revenues

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Users tend to use the search engine provided to them by default. Being a default search engine on an operating system helps the search provider by generating more search advertising revenues. Search-related revenues are important for companies like Google, as they contribute a major portion of Google’s revenues. So Apple’s move isn’t good news for Google.

Microsoft needs to do much more to catch up to Google

As we mentioned above, Bing is still a distant second compared to Google search. Although Apple’s move is a good news for Bing, it needs to do much more to catch up with Google. For Microsoft to gain substantial share in the search market, it will first need to capture a bigger share in the smartphone and tablet operating system market. According to IDC, Microsoft has a share of 3.3% in the global smartphone operating system market, which isn’t enough. Microsoft has started to make some efforts to increase its presence in this market. It bought Nokia’s (NOK) device business last year for a valuation of $7.2 billion. It then made Office free for less-than-nine-inch devices and even made an Office app compatible with the iPad.

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