Google Co-Founder Sergey Brin’s Brilliant Bargaining Tactics Sealed Google’s 2007 Deal With Apple

Alphabet Inc.’s GOOG GOOGL Google has been in the news recently for the wrong reasons. Now, a new set of emails reveals a crucial role played by co-founder Sergey Brin in keeping Google Search as the default search engine on iPhones and Macs.

What Happened: Brin asked his colleagues to hold firm against Apple Inc. AAPL while negotiating for an extension of their deal in 2007 to keep Google Search as the default option on Macs, iPhones, and the Safari browser on Windows.

Brin did not think too highly of the critical analysis from Apple’s negotiating team. He asked his colleagues to stay firm in their belief in negotiating from a stronger place instead of ceding ground to Apple.

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“I agree we should hold firm but I don’t think their analysis is as sophisticated as you suggest,” Brin said in an email.

Brin provided his advice in an email chain discussing the company’s deal with Apple to keep Google Search as the default option. While Apple was asking Google to enter into a longer-term revenue-sharing agreement, Google wanted to maintain the status quo.

Googlers at the time believed that their revenue-sharing terms with Apple were already generous, and giving into Apple’s demands would make the situation worse for them.

This agreement would keep Google as the default search engine on Apple’s devices instead of rival Yahoo. Yahoo Search was also a powerful and widely used engine at the time.

“I’m not sure it will turn out quite that way. But in any case, I think they will agree to our offer,” Brin said, asking his colleagues to maintain their terms and not give into Apple’s demands.

Apple’s Phil Schiller eventually agreed to Google’s offer; the rest is history.

Why It Matters: The ongoing antitrust investigation into Google has revealed that the Sundar Pichai-led company has been paying billions of dollars to Apple and other companies to remain the default search engine.

More specifically, Google reportedly paid Apple close to $19 billion in 2021 alone to retain its place as the default option on the Safari web browser on iPhones, iPads, and Macs.

Brin’s advice to hold firm in 2007 would continue to maintain a partnership that would bring Google the most lucrative users to its platform, while Apple would rake in billions without doing anything.

Sergey Brin Wikimedia Commons

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