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Would Apple Build A Search Engine To Prevent Google From Getting iPhone Data?

Last week financial analyst Gene Munster created something of a stir when he said that there was a “70 percent” chance that Apple would build or buy a search engine for the iPhone in the next five years. Here’s a longer excerpt from the research note:

We believe Apple could utilize data unavailable to Google, data generated by the company’s App Store, to create a mobile centric search engine, which would be a unique offering to Google’s search engine.

An iPhone specific search engine could be a difficult undertaking, but we feel Apple could make a minor acquisition of a search company that has built a web index, like a Cuil, and utilize the index as the base for building its own engine.

We believe the odds of Apple developing a search engine in the next five years are 70%. One hurdle for Apple in developing its own search engine would be generating enough advertiser interest to form a competitive marketplace; however, we believe the rationale for an Apple search product is to protect data rather than generate profit.

The key idea here, according to Munster, is defensive: “we believe the rationale for an Apple search product is to protect data rather than generate profit.” An article in eWeek elaborates the thinking further:

Munster said protecting valuable consumer data and not profit would be the point for Apple’s mobile search engine.

“The data generated on the iPhone OS platform must become an increasing priority for Apple and we believe the company has the resources to develop its own products in both maps and search in the next five years,” Munster said.

He added that Apple could entice enough major advertisers and local resellers like ReachLocal to use the Apple search platform to make a meaningful market place and potentially operate a search product at break even.

Danny Sullivan in a recent column for AdAge argues that Apple is unlikely to develop its own search engine:

[B]uilding a search engine is hard. Damn hard. Just ask Microsoft, which has spent hundreds of millions of dollars to build its own and millions more to market it. Even then, Bing has barely made a dent against Google. It was no iPhone-like product that revolutionized an existing market.

But couldn’t Jobs work some of his magic and transform search in a way that would cause people to flock to an Apple search engine? I doubt it. When you ask people what they most want in search, it’s relevancy and speed. A pretty user interface is far down the list. And developing a relevant search engine is incredibly hard. You need many engineers skilled in search, which Google and Microsoft are already fighting over. You need to pull back billions of pages. You need lots of data centers for blazing speed.

An easier way forward would be to buy someone else’s technology and improve it. Yahoo would have been a great fit — but Yahoo’s going to Microsoft now. There’s Ask, but it has lost talent over the years. Building from scratch isn’t impossible. But by the time you build your search engine to today’s levels, your competitors have probably moved far past you.

I agree with this logic; building a competitive search engine is very expensive and then there is the consumer-behavior mountain to climb. I suppose it’s not entirely out of the question if Apple agrees with Munster that its data need to be shielded from Google’s view. (Google will have several years worth of that data by the time Apple does anything, so it might all be moot.)

Though I believe it’s extremely unlikely that Apple will build its own search engine, few would have predicted Apple getting into the mobile advertising business with its Quttro acquisition.

Opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.

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