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Google pays $19 billion for "traffic aquisition"

by on11 October 2017

A big chunk going to Apple and Android allies.

Google is paying  more than $19 billion a year to help generate adverts.

To put this figure into perspective, this is how much it cost to buy Toshiba’s memory business, and as far as Google is concerned it will not get much benefit beyond a single year’s investment.

The money is used to generate its advertising sales, from the websites lined with Google-served ads to Apple and others that plant Google's search box or apps in prominent spots.

Shareholders are not happy about this cash as it now amounts to 11 percent of revenue for Google's internet properties. The figure was seven percent in 2012.

These Google traffic fees are the result of contractual arrangements parent company Alphabet makes to ensure its dominance.

The company pays Apple to make Google the built-in option for web searches on Apple's Safari browsers for Mac computers, iPhones and other places.

Google also pays companies that make Android smartphones and the phone companies that sell those phones to make sure its search box is front and centre and to ensure its apps such as YouTube and Chrome are included in smartphones.

In the last year, Google has paid these partners $7.2 billion, more than three times the comparable cost in 2012.

Last modified on 11 October 2017
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