Microsoft Discussed Selling Bing to Apple as Google Replacement(bloomberg.com)
bloomberg.com
Microsoft Discussed Selling Bing to Apple as Google Replacement
https://www.bloomberg.com/news/articles/2023-09-28/microsoft-discussed-selling-bing-to-apple-as-google-replacement
58 comments
Do you think Google pays $19B and doesn’t make more than that?
If I own several oilfields and Chevron wants to pay me for the crude coming out of the ground, why should I waste money building a refinery?
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plus bing continuing to exist means you can push Google for more money during the negotiations
What about the long term, the opportunity cost, the billions/trillions they are not making by helping someone else make it?
We should also add a plausible hypothesis where search engines are partially replaced by other interfaces, such as LLMs prompts. In that case we are in front of the innovators dilemma for Google and Apple just need to wait until the sky clears, think again, and act.
DoJ says $4-$7b, which Apple disputes.
Simple it is not.
Google is apple's main competitor and building an actual rival might be extremely beneficial for them.
Google supposedly makes more money from this arrangement then the spend, which means of apple can run a successful search engine they can take more of the profit.
Apple has loads of cash which they look for ways to invest, Google shows that search engine can be an immensely valuable investment.
Obviously there are other concerns, chief being consumer sentiment here I imagine.
Google is apple's main competitor and building an actual rival might be extremely beneficial for them.
Google supposedly makes more money from this arrangement then the spend, which means of apple can run a successful search engine they can take more of the profit.
Apple has loads of cash which they look for ways to invest, Google shows that search engine can be an immensely valuable investment.
Obviously there are other concerns, chief being consumer sentiment here I imagine.
I don’t think it’s quite that simple. Google are, after all, Apple’s biggest competitor in the mobile space and Android has Google search deeply integrated. By comparison Apple’s Google search integration is always going to look inferior, it would make sense if they sought to bring it all in house.
>Spending huge sums of money. Or receiving huge sums of money. Which would you prefer?
No, that's not the way too look at it. Apple spending billions to buy the Bing search engine would then let Apple collect 100% of the search ads revenue instead of splitting someone else's ad revenue with a middleman (aka Google).
So the business decision matrix is based on whether 100% of ad revenue minus the acquisition & ongoing maintenance costs of Bing -- would be worth more than X% of Google's revenue split.
Acquiring the "Bing search engine" isn't just the index ranking algorithm. It also includes getting the whole back-office infrastructure of ads-monetization management & dashboards for advertisers to log in to bid+buy ads.
No, that's not the way too look at it. Apple spending billions to buy the Bing search engine would then let Apple collect 100% of the search ads revenue instead of splitting someone else's ad revenue with a middleman (aka Google).
So the business decision matrix is based on whether 100% of ad revenue minus the acquisition & ongoing maintenance costs of Bing -- would be worth more than X% of Google's revenue split.
Acquiring the "Bing search engine" isn't just the index ranking algorithm. It also includes getting the whole back-office infrastructure of ads-monetization management & dashboards for advertisers to log in to bid+buy ads.
In light of recent AI advancements, deciding not to buy a search engine seems like it might have been a good decision.
A lot is going to change in how search, and the associated business model, works in the next few years.
A lot is going to change in how search, and the associated business model, works in the next few years.
Or perhaps not. You may note that yesterday Head of Engineering and Product for Bing said [0]:
"Many people ask me whether LLMs will make web search engines less valuable, but the opposite is actually the case. LLMs make web search more critical than ever, since the combination of LLMs + web search is what produces fresher and more accurate chat results."
This is true, but what he didn't mention is where the the biggest source of pre-training data is from. This was revealed earlier this week by his colleague Mikhail Parakhin, CEO of Microsoft Ad and Web Services, in the Google antitrust trial. Apparently he revealed "Bing Chat and Google Bard leverage indexes." [1].
A point on which I speculated on back in February [2].
[0] https://twitter.com/JordiRib1/status/1707103407050477772
[1] https://twitter.com/jason_kint/status/1706866080130498939
[2] https://blog.mojeek.com/2023/02/will-chatbots-kill-the-searc...
"Many people ask me whether LLMs will make web search engines less valuable, but the opposite is actually the case. LLMs make web search more critical than ever, since the combination of LLMs + web search is what produces fresher and more accurate chat results."
This is true, but what he didn't mention is where the the biggest source of pre-training data is from. This was revealed earlier this week by his colleague Mikhail Parakhin, CEO of Microsoft Ad and Web Services, in the Google antitrust trial. Apparently he revealed "Bing Chat and Google Bard leverage indexes." [1].
A point on which I speculated on back in February [2].
[0] https://twitter.com/JordiRib1/status/1707103407050477772
[1] https://twitter.com/jason_kint/status/1706866080130498939
[2] https://blog.mojeek.com/2023/02/will-chatbots-kill-the-searc...
While valid points, let's not ask the head of engineering and product for a search engine whether search engines have a future as products.
Why does neither Microsoft nor Google nor Apple take the lead and offer free LLM answers like Google offers free search results?
Is that because there are simply not enough GPUs out there to do this at scale?
If so, it will become really interesting once that constraint goes away. There might be a shift in the search space like there was a shift from analog to digital photography.
Is that because there are simply not enough GPUs out there to do this at scale?
If so, it will become really interesting once that constraint goes away. There might be a shift in the search space like there was a shift from analog to digital photography.
Getting results from a LLM with no guarantee of correctness is like computational photography. It looks nice, but that thing is not real.
Instead, I'm using Kagi, and feeding it old school search queries. Which provides me results I want in the first three slots, all the time.
Why fix something ain't broken?
Instead, I'm using Kagi, and feeding it old school search queries. Which provides me results I want in the first three slots, all the time.
Why fix something ain't broken?
Search wasn't broken Google needed a business plan and chose web ads. That is what broke search. The bifurcation of interests between selling ads and serving search results.
Who cares what's real if it's useful? We use all the times fictions that are not "real" but are useful, such as law codes, corporations, religions, etc.
I hope Harari appreciators will one day realise that social constructs are real too
When you're doing scientific research, or looking for public transport; the difference can decide your career's future or likelihood of you going home at night.
careers are just social constructs; and I've not seen yet Google maps fail to find me a public transport
> careers are just social constructs;
Well, too bad that that social construct supplies you the tokens that allows you to buy food.
Or do you imply that food is not real, because everything leading to it is also unreal, even if it's physical (e.g.: money). If that's the case, try to survive without it for a couple of months.
> and I've not seen yet Google maps fail to find me a public transport
This is because Google Maps doesn't use LLMs, but standard and deterministic indexing methods working on hard data provided by governments.
Well, too bad that that social construct supplies you the tokens that allows you to buy food.
Or do you imply that food is not real, because everything leading to it is also unreal, even if it's physical (e.g.: money). If that's the case, try to survive without it for a couple of months.
> and I've not seen yet Google maps fail to find me a public transport
This is because Google Maps doesn't use LLMs, but standard and deterministic indexing methods working on hard data provided by governments.
Microsoft does offer "Bing Chat" (derived from ChatGPT) integrated in their Edge browser, effectively free.
Even if there's enough GPUs they also needs to be available at a cost that makes it financially viable, both in terms of purchasing price, but also power and cooling. Environmentally it might not look to good to offer LLM answers to a wider audience, there are already concerns about the water consumption of ChatGPT in some regions, see: https://fortune.com/2023/09/09/ai-chatgpt-usage-fuels-spike-...
Obvious answer: because it is too expensive to offer it for "free".
Even if you had the GPUs, compute and electricity cost money:
https://medium.com/@zodhyatech/how-much-energy-does-chatgpt-...
Even if you had the GPUs, compute and electricity cost money:
https://medium.com/@zodhyatech/how-much-energy-does-chatgpt-...
YouTube made a loss for many years because the storage and data costs were vastly higher than their revenue, despite offering the product for free.
Those were very different market conditions though
Apple should rebrand it as “Ask Jobs”
The article makes it a little fuzzy if Apple would have bought Bing outright, taking it completely of Microsofts hands, or if they would have bought access to including it in Apple products.
Had Apple bought Bing they'd most likely have taken it private and not offered its search API to others, effectively preventing the creation of search engines like DuckDuckGo and Ecosia.
Had Apple bought Bing they'd most likely have taken it private and not offered its search API to others, effectively preventing the creation of search engines like DuckDuckGo and Ecosia.
"The money generated by the Google deal was a key reason why Apple declined acquiring Bing, according to the people" .... "with knowledge of the matter"
At current P/E and an estimated $18bn the deal is worth half a trillion $.
At current P/E and an estimated $18bn the deal is worth half a trillion $.
Ultimately though it’s clear that Google and Microsoft place high value on Apples customers, who are much richer and spend more money than customers using Android or other devices.
No company has that kind of user base that Apple has. They do this by designing the best products and services for a very high premium price that attracts those users. It’s remarkable that they can release a phone for $1600.00 (pro max with 1TB storage) and sell millions of them every year.
No company has that kind of user base that Apple has. They do this by designing the best products and services for a very high premium price that attracts those users. It’s remarkable that they can release a phone for $1600.00 (pro max with 1TB storage) and sell millions of them every year.
I use Apple products and I am in no way, in any sense of the word, "rich". I'm not even close.
And why is it that someone tries to show how expensive Apple products are, they always list the highest end, most tricked out product? "oh, a Macbook Pro costs over $5000 dollars, but you can get a Windows laptop for only $450!"
I'm typing this on a desktop Mac that costs less than a typical video card on a PC. But hey, I'm "rich".
And why is it that someone tries to show how expensive Apple products are, they always list the highest end, most tricked out product? "oh, a Macbook Pro costs over $5000 dollars, but you can get a Windows laptop for only $450!"
I'm typing this on a desktop Mac that costs less than a typical video card on a PC. But hey, I'm "rich".
>It’s remarkable that they can release a phone for $1600.00 (pro max with 1TB storage) and sell millions of them every year.
So? The galaxy s23 ultra 1tb has msrp of $1619.99
https://www.samsung.com/us/smartphones/galaxy-s23-ultra/buy/
So? The galaxy s23 ultra 1tb has msrp of $1619.99
https://www.samsung.com/us/smartphones/galaxy-s23-ultra/buy/
In this case it’s likely the ratio of units sold rather than “millions” that expresses GP’s point. You have a point that Samsung is the only company really competing in this space though. See https://www.forbes.com/sites/johnkoetsier/2023/08/29/top-10-...
I'm not 100% sure that being wealthier explains it all. Over the past 15 years I've owned Android and iOS/iPadOS devices and I've spent a lot more in the Apple App store.
During that whole time I've also owned a Windows computer and I've spent even less in the Microsoft app store. I'm not sure I've ever spent a dime on Linux (other than ordering some distros on CD before I had a good internet connection).
> It’s remarkable that they can release a phone for $1600.00 (pro max with 1TB storage) and sell millions of them every year.
It's not that remarkable. I keep my phone 3 years so it works out to a little more than $1 / day factoring in trade-in or resale at the end of that time. A lot of people can afford that.
During that whole time I've also owned a Windows computer and I've spent even less in the Microsoft app store. I'm not sure I've ever spent a dime on Linux (other than ordering some distros on CD before I had a good internet connection).
> It’s remarkable that they can release a phone for $1600.00 (pro max with 1TB storage) and sell millions of them every year.
It's not that remarkable. I keep my phone 3 years so it works out to a little more than $1 / day factoring in trade-in or resale at the end of that time. A lot of people can afford that.
1$/day is kinda insane if you put it that way. It's equivalent to a $30 subscription, sure, some people would gladly pay that much, but for most of the population in first world countries it's untenable, let alone the rest of the world. And you got this value after accounting for resale.
I did a similar calculation for my current phone and it came out to be $12 per month if I keep it for 4 years, which I thought to be too high.
I did a similar calculation for my current phone and it came out to be $12 per month if I keep it for 4 years, which I thought to be too high.
Considering de facto almost $20 minimum wage in US, $1 is like 3 minutes of work - hardly unaffordable considering average person spends 3-4 hours/day on the phone.
$20 doesn’t seem accurate.
https://en.m.wikipedia.org/wiki/Minimum_wage_in_the_United_S...
https://en.m.wikipedia.org/wiki/Minimum_wage_in_the_United_S...
> It's not that remarkable.
it's actually quite remarkable that apple's phone _can_ be made with the level of component quality, at this price point. Similar feature phones from other manufacturers are just not quite on the same level of quality, even at a higher price point. You might even consider it as "cheap" (for what you get).
This is actually why i think apple has such a hold on their marketshare. It's not just lockin on the ecosystem.
it's actually quite remarkable that apple's phone _can_ be made with the level of component quality, at this price point. Similar feature phones from other manufacturers are just not quite on the same level of quality, even at a higher price point. You might even consider it as "cheap" (for what you get).
This is actually why i think apple has such a hold on their marketshare. It's not just lockin on the ecosystem.
> the best products and services
Stuff so great you'd have to pay me to use it. In my books, Apple prices are just a tax on people who are bad with computers and organizing their own stuff in the same way lotteries are a tax on not understanding basic math.
Stuff so great you'd have to pay me to use it. In my books, Apple prices are just a tax on people who are bad with computers and organizing their own stuff in the same way lotteries are a tax on not understanding basic math.
That’s hilarious considering one of Apples most loyal bases is software engineers. Even a number of Linux kernel maintainers are on MacBooks
How many if we take away all the noobs who can't start their own code without clicking play on the IDE though?
Feel free to downvote, I've met such people in senior SWE positions
Feel free to downvote, I've met such people in senior SWE positions
I agree that a lot of software engineers use MacOS, though maybe not to the extent of 2007. Linux Desktops seem more viable than ever.
> Even a number of Linux kernel maintainers are on MacBooks
They aren't running MacOS on them though, are they? I'd really like a citation on this if you think they are.
> Even a number of Linux kernel maintainers are on MacBooks
They aren't running MacOS on them though, are they? I'd really like a citation on this if you think they are.
*wealthy software engineers in English speaking countries
That's an HN biased opinion, if you look outside the startup ecosystem, many developers in the enterprise don't use macos.
> Apple prices are just a tax on people who are bad with computers
That's kind of the beauty of it. You don't have to be good at computers to use Apple devices and get things done. I think people forget that nobody buys a computer because they want to use a computer. They buy one because they want to run Office or GarageBand or Photoshop or Portal etc...
That's kind of the beauty of it. You don't have to be good at computers to use Apple devices and get things done. I think people forget that nobody buys a computer because they want to use a computer. They buy one because they want to run Office or GarageBand or Photoshop or Portal etc...
> I think people forget that nobody buys a computer because they want to use a computer.
As in, I am "forgetting" that I am an exact clone of the "the average user", whoever that even is, instead of knowing precisely what I like and respect, and what I don't? Nope.
My first use of an Apple was 1999 when friends asked me to help them get on the internet when their parents were away. Never had used an Apple before, took me like 30 mins, all the while feeling insulted by that one-button mouse that was completely unusable without the modifier key on the keyboard. That was my initial impression -- this has to be a joke -- and everything I saw and used since then just confirmed it. From users not knowing what a file is, to devs constantly having to jump through hoops to keep software running because Apple has some new hoops to jump through.
If it's good enough for you, that's fine. Doesn't change that it's not good enough for me. Training wheels are great for zoning out on auto-pilot, they just suck when you're fully focused and would prefer to be able to make tighter turns.
The average user is getting so exploited and fucked over every single day, that what they think they want because they don't know better doesn't impress me in the least.
As in, I am "forgetting" that I am an exact clone of the "the average user", whoever that even is, instead of knowing precisely what I like and respect, and what I don't? Nope.
My first use of an Apple was 1999 when friends asked me to help them get on the internet when their parents were away. Never had used an Apple before, took me like 30 mins, all the while feeling insulted by that one-button mouse that was completely unusable without the modifier key on the keyboard. That was my initial impression -- this has to be a joke -- and everything I saw and used since then just confirmed it. From users not knowing what a file is, to devs constantly having to jump through hoops to keep software running because Apple has some new hoops to jump through.
If it's good enough for you, that's fine. Doesn't change that it's not good enough for me. Training wheels are great for zoning out on auto-pilot, they just suck when you're fully focused and would prefer to be able to make tighter turns.
The average user is getting so exploited and fucked over every single day, that what they think they want because they don't know better doesn't impress me in the least.
[dupe]
More discussion over here earlier: https://news.ycombinator.com/item?id=37696992
They don‘t need Bing. They‘re working on their own AI, and AI will replace all search engines. ChatGPT is already slowly but steadily killing Google as we speak.
They are receiving $19B in annual revenue today by having Google as default search engine (which is all profit for them).
Or they could spend billions on the acquisition of Bing + more billions annually to run Bing.
Spending huge sums of money. Or receiving huge sums of money. Which would you prefer?