Microsoft discussed selling Bing to Apple in 2020 as Google’s replacement

By Mark Gurman and Dina Bass

Microsoft Corp. discussed the sale of its Bing search engine to Apple Inc. around 2020, a deal that would have replaced Google as the default option on the iPhone maker’s devices, according to people with knowledge of the matter.

Microsoft executives met with Apple’s service chief Eddy Cue, who discussed the current search engine relationship with Alphabet Inc.’s Google. mediated to discuss the possibility of acquiring Bing, said the people, who asked not to be identified because the situation was confidential. The talks were exploratory and never reached an advanced stage, they said.

Over the years, the companies have discussed other ways to make Bing the preferred option, though Apple ultimately stuck with Google. These conversations have taken on new meaning as the US Department of Justice is engaged in a legal battle with Google to show that the company has abused its search dominance. Apple’s relationship with Google, which pays billions of dollars to give its search engine top rankings on the iPhone and other devices, is at the center of the case.

Representatives from Microsoft and Apple declined to comment.

Microsoft launched Bing in 2009 as a rival to Google, but the property never gained market share in any meaningful way. Google still rules the industry, with Bing accounting for less than 10% of searches.

Apple and Microsoft are now embroiled in the government’s lawsuit against Google, with executives from both companies testifying at the ongoing trial. The Justice Department is using the Apple deal as evidence that Google unfairly dominates the search market. In a testimonial earlier this week, Apple’s Cue walked back that claim, saying his company uses Google because it is the best search option available.

Apple and Google made their first search engine deal in 2002, before Apple released its first Mac web browser. Over time, the agreement expanded to Apple’s new devices, most notably the iPhone. According to the DOJ, Apple would receive between $4 billion and $7 billion annually from the scheme by 2020.

The deal covers the Safari web browser for the iPhone, iPad and Mac, and the Cupertino, California-based company will receive a percentage of the revenue Google generates from searches on the Apple browser.

The money generated by the Google deal was a major reason why Apple declined to acquire Bing, the people said. The company was also concerned about Bing’s ability to compete with Google on quality and capabilities, they said.

Still, Apple has used Bing in parts of its operations. The Microsoft product was the default web search engine within Siri and Spotlight – the feature that runs searches from the home screen of iPhone and iPad – between 2013 and 2017. But the company returned to Google in 2017 as part of an updated revenue sharing agreement. Bing remains an option for searching in Safari.

On Thursday, Jon Tinter, director of business development at Microsoft, said his company is considering a billion-dollar investment in its relationship with Apple in 2016, an effort to surpass Google and make Bing the default option on Apple devices. The CEOs of both companies, Tim Cook and Satya Nadella, even met to discuss a deal, Tinter said.

Today, Google remains the search engine in Siri and Spotlight, as well as the default option in Safari. During his testimony, Cue said the deal between Apple and Google was extended in 2021. That would have been a year or more after Microsoft’s pitch to sell Apple its Bing unit.

Cue suggested that Bing’s technology was inferior to Google’s, and said he “don’t know what we would have done” if negotiations with Google ever failed.

If Apple had ultimately purchased Bing, it’s unlikely the company would have simply integrated the brand into its platform. With previous acquisitions, Apple has bought underlying technology and resources to build a new feature.

In his testimony, Cue emphasized that Apple sees no need to develop its own search tool, as Google is clearly the best option. This differs from the company’s approach in other areas. It competes with Google in mapping software and voice assistants, as well as operating systems for phones and computers.