Apple Removes YouTube App: Google Wins
Andrés is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
The war between Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOG) has escalated further lately, after eliminating Google Maps from its devices, Apple has announced it won´t be including a YouTube app as a default on IOS anymore. Ironically, Google is likely to be the biggest beneficiary from this last change. As long as Apple doesn´t mess with search, Google doesn´t have much to regret.
Keep your friends close and your enemies closer. The legendary quote from The Godfather II may be appropriate to describe the competitive dynamics between the two giants of technology and mobile. Apple had control over YouTube under the old scheme, but it has now given Google the freedom to develop its own version of the app, as well as the possibility to monetize it via advertising.
Apple sells hundreds of millions of devices, so it could seem like a blow to Google not having YouTube preloaded into all those smartphones and tablets. However, YouTube is tremendously popular, and most people can easily be expected to download the app by themselves, this new application will also be built and updated by Google.
Apple had not updated its own version of the YouTube application much since its first launch, and it even had some serious drawbacks, like some YouTube content which could not be accessed via this app. Google on the other hand, has dedicated much more energy to keeping its YouTube app fresh in other platforms, so the new app for IOS developed and updated by Google should be much better than the Apple version.
Perhaps more importantly, Google will have the possibility to include ads into YouTube for IOS, and that has the potential to become a powerful revenue source for the online search giant over time. According to the New York Post, YouTube has an audience of 800 million users around the world who watch some three billion hours of content a month; potential for monetization is clearly huge if Google plays its cards right.
This last move from Apple will likely turn out as a positive for Google, the thing that should concern the online search giant is the possibility of Apple divorcing from Google in search. Other search engines like Bing from Microsoft (NASDAQ: MSFT) or Yahoo (NASDAQ: YHOO) are included in IOS devices, but Google is the default option. Being the most popular search engine and the default option in IOS, Apple is sending most of its search traffic to Google, arguably its biggest competitor in mobile.
Would Apple choose Microsoft or Yahoo as its default search option? That doesn´t seem very likely unless the company is convinced that such a change can be implemented without hurting the user experience. Apple is known for putting quality and products above competitive strategy or business considerations.
It is really hard to make an objective assessment about the quality of search results generated by Google versus other alternatives, but the choice made by consumers is really clear: Google is a verb, while Bing and Yahoo are only search engines.
Siri may be Apple´s way to look for a good enough alternative to finally displace Google in search without hurting user experience, but it’s still a long way until Apple´s digital assistant can become a concrete threat to Google.
As long as Apple can´t find a better alternative to Google in search, the damage to the company coming from this increasing competitive pressure is likely to be contained. In fact, Google now has the possibility to develop a better and more profitable application for YouTube in IOS, so the online search giant looks like the biggest beneficiary from the last move.
acardenal owns shares of Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. Motley Fool newsletter services recommend Apple, Google, and Yahoo!. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.