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Microsoft is willing to incur substantial losses to secure Bing as Apple’s default search engine

In 2022, the Department of Justice (DOJ) initiated legal proceedings against Google for its agreements to have its search engine set as the default option on most browsers and all US smartphones. During the ongoing trial, Microsoft’s CEO, Satya Nadella, made some noteworthy statements regarding Bing, Google, and Apple.

Nadella was among the first witnesses to testify in Google’s antitrust case. As reported by The Verge, Nadella portrayed Google as an imposing barrier to Microsoft’s aspirations of establishing a competitive search engine. He emphasized that Google’s position as the default search choice has severely impacted Bing both as a business and a product.

Nadella’s argument for Bing’s inability to compete with Google centers on the essential factors of scale and user data. He believes that, without these, it is impossible to rival Google’s solution.

The DOJ has accused Google of investing billions to secure its position as the default choice. In 2022, DOJ attorney Kenneth Dintzer informed a federal judge that “Google invests billions in defaults, knowing people won’t change them. They are buying default exclusivity because defaults matter a lot.”

Microsoft also recognizes the immense value of being the default option. According to reports, Nadella indicated that he would be willing to offer Apple the entire economic benefit of a search agreement to make Bing the default search engine. Nadella estimated that such a deal could cost Microsoft up to $15 billion annually. Nevertheless, he believes it would be a worthwhile investment to strengthen Bing’s competitiveness and increase its prominence.

While Microsoft has faced challenges in competing with Google’s search engine, it has achieved some success through its embrace of AI. However, Microsoft’s Bing Chat faces formidable competition from ChatGPT and Bard.

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