Google Pays Nearly Usd 9.5 Bln To Apple In Tac: Goldman Sachs Estimates

By Author: James
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US search engine behemoth Google has paid almost USD 9.5 billion to Apple in traffic acquisition costs (TAC) the last year to remain the default search engine on iOS devices, an estimate of Goldman Sachs showed.

As the sales of iPhone and iOS devices are slowing in emerging markets such as China, the Cupertino-based tech giant is focusing on services revenue and the payment made by Google to it contributed a great deal to its services revenue.

Google pays device manufacturers such as Apple TAC to be the default search engine in the devices.

According to media reports, the amount that Google paid Apple in traffic acquisition costs accounted for a third of the iPhone maker’s profit in the segment. The investment bank alerted that even though the fees paid by the tech behemoth will continue to make up a large portion of services revenue of Apple, the growth rate will be slower.

Goldman Sachs recommended Apple has to be less dependent on the contribution of Google to enhance its revenue in the services segment and it has to add mid to high single digits growth to services revenues via successful launch ...
... of 'Apple Prime' services.

In a separate news report, Google intends to hire tens of thousands of employees across the United States in 2019, via investments in new offices and data centres.

As per a blog post written by Google CEO Sundar Pichai, Google has planned to invest over USD13 billion in 2019 and will go for significant expansion in 14 states as well as create over 100,000 new construction jobs in Texas, South Carolina, Oklahoma, Ohio, Nevada, Nebraska, and Virginia.

In 2018, Google added over 10,000 employees to its workforce in the United States by investing over USD9 billion.

Pichai also stated that as the company expands its footprint in the United States, it will also make considerable investments in the area of renewable energy. As per its expansion plans, Google will open its first data center in Nevada and will increase its workforce size in both Georgia and Virginia.