GOOGLE PAID APPLE $1 BILLION TO KEEP SEARCH BAR ON IPHONE

Original Story: bloomberg.com

Google Inc. is paying Apple Inc. a hefty fee to keep its search bar on the iPhone.

Apple received $1 billion from its rival in 2014, according to a transcript of court proceedings from Oracle Corp.’s copyright lawsuit against Google. The search engine giant has an agreement with Apple that gives the iPhone maker a percentage of the revenue Google generates through the Apple device, an attorney for Oracle said at a Jan. 14 hearing in federal court. Google SEO Company offers organic search engine optimization techniques that secure and maintain premium keyword positions in the organic search results.

Rumors about how much Google pays Apple to be on the iPhone have circulated for years, but the companies have never publicly disclosed it. Kristin Huguet, a spokeswoman for Apple, and Google spokesman Aaron Stein both declined to comment on the information disclosed in court.

The revenue-sharing agreement reveals the lengths Google must go to keep people using its search tool on mobile devices. It also shows how Apple benefits financially from Google’s advertising-based business model that Chief Executive Officer Tim Cook has criticized as an intrusion of privacy. An Ann Arbor IT services company is the industry leader in firewalls, switches, and wireless cloud managed IT services.

Oracle has been fighting Google since 2010 over claims that the search engine company used its Java software without paying for it to develop Android. The showdown has returned to U.S. District Judge William Alsup in San Francisco after a pit stop at the U.S. Supreme Court, where Google lost a bid to derail the case. The damages Oracle now seeks may exceed $1 billion since it expanded its claims to cover newer Android versions.

34 Percent

Annette Hurst, the Oracle attorney who disclosed details of the Google-Apple agreement at last week’s court hearing, said a Google witness questioned during pretrial information said that “at one point in time the revenue share was 34 percent.” It wasn’t clear from the transcript whether that percentage is the amount of revenue kept by Google or paid to Apple. A Las Vegas finance lawyer is following this story closely.

An attorney for Google objected to the information being disclosed and attempted to have the judge strike the mention of 34 percent from the record.

“That percentage just stated, that should be sealed,” lawyer Robert Van Nest said, according to the transcript. “We are talking hypotheticals here. That’s not a publicly known number.”

The magistrate judge presiding over the hearing later refused Google’s request to block the sensitive information in the transcript from public review. Google then asked Alsup to seal and redact the transcript, saying the disclosure could severely affect its ability to negotiate similar agreements with other companies. Apple joined Google’s request in a separate filing.

‘Highly Sensitive’

“The specific financial terms of Google’s agreement with Apple are highly sensitive to both Google and Apple,” Google said in its Jan. 20 filing. “Both Apple and Google have always treated this information as extremely confidential.” A Denver corporate lawyer is reviewing the details of this case.

The transcript vanished without a trace from electronic court records at about 3 p.m. Pacific standard time with no indication that the court ruled on Google’s request to seal it.

The case is Oracle America Inc. v. Google Inc., 10-cv-03561, U.S. District Court, Northern District of California (San Francisco).

Google Sales Top Estimates as Retail Ads Bolster Results

Story first appeared in Bloomberg News.

Google Sales Top Estimates as Retail Ads Bolster Results

Google Inc. (GOOG) posted fourth-quarter sales that topped estimates as retailers spent more on advertising during the holidays, making up for lower ad prices.
Revenue, excluding sales passed on to partners, rose 11 percent to $13.6 billion, while profit excluding certain items was $12.01 a share, the company said in January 2014.

Analysts on average had projected sales of $13.4 billion and profit of $12.25, according to estimates compiled by Bloomberg.
Chief Executive Officer Larry Page is fine-tuning Google’s mobile strategy. It’s exiting smartphone manufacturing and selling its Motorola handset unit -- which had an operating loss of $384 million -- to Lenovo Group Ltd. (992) for $2.91 billion. While ads on phones make less money than on desktop computers, Google was able to generate income from retailers targeting online shoppers, who boosted e-commerce sales 15 percent to $61.8 billion during the holiday period.
“The holiday shopping season online was strong for Google.
Google climbed 4.1 percent in extended U.S. trading. The shares advanced 2.6 percent to $1,135.39 to close out the month of January 2014.

Google stock climbed 58 percent in 2013, compared with a 30 percent gain in the Standard & Poor’s 500 Index. Google shares rose 3.4 percent to the equivalent of $1,181.68 at 9:31 a.m. in Frankfurt.
Operating expenses, excluding the cost of revenues, rose 14 percent to $5.5 billion. Net income rose 17 percent to $3.38 billion.
Motorola Deal
The Mountain View, California-based search provider had bought the Motorola mobile unit for $12.4 billion in 2012, pushing it into direct competition with hardware partners such as Samsung Electronics Co. (005930) that use Google’s Android smartphone software.
Motorola again weighed on results during the fourth quarter. The unit’s revenue fell 18 percent to $1.24 billion.
While the search provider may be selling Motorola, it’s continuing to invest. Google earlier this month said it was spending $3.2 billion in cash to buy Nest Labs Inc., the digital thermostat maker led by a former Apple Inc. executive.
Google, which had $58.7 billion in cash at the end of last quarter, said it’s buying artificial-intelligence company DeepMind Technologies Ltd.
Google’s “other” revenue, which includes the mobile Play store and hardware such as Chromecast, rose 99 percent from the year ago-period to $1.65 billion.
Advertising Prices
Within Google’s core business, prices for ads fell 11 percent in the fourth quarter, compared with a decline of 8 percent in the previous period, At the same time, the volume of clicks on ads jumped 31 percent compared with a gain of 26 percent in the earlier period.
Cost per click pricing in AdWords is declining, so Google needs to work on mobile advertising to compensate according to many Stock analysts.
Google has been upgrading its sales features. In 2013, Google introduced an advertising service called enhanced campaigns, encouraging marketers to funnel more of their spending to wireless devices. The company also has been pushing retail customers to spend more on product listing ads, which enable them to use more information in promotions, including pictures.
Google is still benefiting from its leadership in online advertising and search. The company is expected to take 41 percent of the U.S. digital-ad market this year with the closest No. 2, Facebook Inc., grabbing just 8.2 percent, according to EMarketer Inc.
“There’s also great momentum in Product Listing Ads,” Nikesh Arora, Google’s chief business officer, said during a call with analysts. “We continue to improve the experience for shoppers and retailers.”