Apple to develop its own search engine?

[dhilipkumar]

Chicago (IL) - Apple has been mostly absent from online and search engine markets. The company is barely dipping its toes into Web 2.0 with MobileMe, but a rocky launch an ongoing problems issues still weigh on the service and shows Apple's inexperience in this segment. But that might change: According to TechCrunch, Apple may either build its own search engine or will at least develop a search engine interface for its own applications.


Realistically, there is no information that would support the search engine claim. For example, Apple is not (publicly) hiring search engine engineers and it would be difficult to create a profitable business model for a product that is rather unlikely to be able to compete effectively with Google or Yahoo right off the bat.

However, we know that such a central component could also be a key piece in an online strategy that may connect future applications and support the firm's vertical integration approach.

Despite its problems, MobileMe is a good example for an integrated software strategy. It integrates with the iPhone, iPod touch, Mac and PCs and synchronizes contacts, calendars, photos and email seamlessly between devices. If Apple had had to rely on third-party services, it would be hard to imagine that Apple would have enabled device syncing. Offering more such service in the future just makes sense.

But what about a search engine? We would not be too surprised if Apple, like many others, would want a slice of the online advertising pie estimated by the Kelsey Group at $45 billion globally in 2007, or 7.4% of the total $600 billion global advertising market. But would Apple build its own search engine from scratch in a project that could cost years and is likely to cost hundreds of millions of dollars? Both Microsoft and Yahoo tried to catch up with Google and have failed so far, despite engineering talent and substantial financial resources.