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Why Yahoo Is Hoping to Partner with Apple Safari



Google’s partnership with Apple Safari

In the last part of the series, we discussed Yahoo’s partnership with Microsoft. In this part of the series, we’ll discuss Yahoo’s (YHOO) plans to partner with Apple’s (AAPL) Safari in a move to grab Google’s share in the search market.

Google (GOOG) has been the default search engine on Apple’s (AAPL) Safari browser since the iPhone’s launch in 2007. According to a report from Morgan Stanley, Apple takes a reported $1 billion annually from Google to keep it as a default search engine on iOS devices. Still, Apple might drop its partnership with Google, as their contract is expected to expire in early 2015.

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Since the smartphone market took off in 2000 and after the launch of Google’s Android, both Apple and Google are in cutthroat competition with each other. Apple considers Android a stolen product, so in order to punish Google, Apple dropped both Google Maps and YouTube as preinstalled apps on the iPhone.

Yahoo might negotiate a deal with Apple Safari

During the earnings conference call, Yahoo’s CEO hinted at striking a deal with Apple’s (AAPL) Safari. Yahoo’s CEO said that the company is pretty serious about its search distribution business and that the Safari users are among the most engaged and lucrative users in the world. Yahoo is hoping to make a deal with Apple considering Apple’s volume and end user base.

For the last year, Yahoo’s (YHOO) CEO has been working on a plan to convince Apple to drop Google and replace Yahoo as its default iOS search engine. Such a move will help Yahoo to enhance its share in the search market.

According to a report from Re/code, Yahoo has prepared detailed plans, including images of what a search product would look like, and hopes to present them to Apple execs. Yahoo already is the default data source on the iPhone for the device’s stocks and weather apps.

Yahoo recently negotiated a similar deal with Mozilla Firefox last year.

Google leads in US browser market share

According to StatCounter Global Stats, Google (GOOG) has surpassed Microsoft (MSFT) in terms of the US browser market share. Google browsers include both the desktop-based Chrome and the mobile-based Android. Google’s share increased from 39% in January 2014 to about 44% in January 2015. Meanwhile, Microsoft’s Internet Explorer share declined from 24% to about 21% during the same period, as the chart above shows.

Interestingly, Google’s Chrome is a market leader on desktops with only 42% market share as of January 2015. Apple’s (AAPL) Safari is the most popular browser on mobile devices, with a 44% market share.

Investors can gain portfolio exposure to Apple, Microsoft, and Google by considering the PowerShares QQQ Trust Series 1 ETF (QQQ). All these companies together have a 29% weight in QQQ.


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