Microsoft blames Google for Apple rejecting offer to buy Bing

Microsoft claims its attempts to sell Bing to Apple were blocked by Google.

The tech giant’s CEO of Advertising and Web Services, Mikhail Parakhin, said he offered Apple more than 100% of the revenue or gross profit to make Bing its default search engine – but the proposal was rejected because of the company’s deal with Google.

Speaking at the federal antitrust trial, Parakhin alleged this was despite Microsoft offering to pay Apple more than Google – which he claims was offering in the region of 60%.

How much did Microsoft offer Apple? Microsoft’s corporate vice president for business development Jon Tinter didn’t reveal exactly how much its offer to Apple was worth, but it was enough that the tech giant would have sustained a several billion dollar loss as a result. Tinter explained the company felt the short-term loss would be a justified investment because of the importance of default search engine status.

Why we care. Apple’s decision to reject Microsoft’s higher monetary offer for Bing as the default search engine implies that the Google deal might not be solely based on financial considerations. This could reinforce Google’s argument that it’s preferred for its superior product. Nevertheless, it underscores the significance of default status for search engines, as Microsoft was willing to incur a significant loss for the position.

Better offer than Google. While Tinter didn’t provide the exact dollar amount Microsoft offered Apple, he asserted that Microsoft was confident it presented a superior deal compared to Google. He explained: “That’s based on our best estimates of the revenue payments that Google was making to Apple in the United States.”

Samsung also shut down potential sale. Tinter went on to reveal that Microsoft had also tried to pitch Samsung about making Bing the default search engine on its products. However, he claims these conversations were shut down by the tech giant in their early stages.

Tinter allegedly urged Samsung to at least allow Microsoft to try and make an offer that could rival its deal with Google. But the tech giant told Microsoft that negotiations wouldn’t be worth discussing because of the company’s contract with Google.

What has Microsoft said? Parakhin told the court at the federal antitrust trial:

• “We were just big enough to play but probably not big enough to win, if that makes sense.”
• “The optimal thing for Apple to have done — and again, I think in closed session, maybe we’ll end up looking at some of the sort of math on this — would have been to have switched to Microsoft in the United States, taken our aggressive offer there, and continue with sort of Google in the rest of the world.”

Deep dive. Read our Google antitrust trial updates for the latest developments in the courtroom.