Apple to Google: It’s All About The Benjamins, Baby

It appears that Bing’s possible appearance on the iPhone may be motivated by more than Apple’s desire to snub Google.

Sources close to the deal claimed that Google’s contract with Apple for exclusive iPhone search was worth $100 million per year, plus a slice of ad revenue. Microsoft has reportedly offered Apple more cash and a bigger slice of the ad revenue pie to usurp Google’s exclusive deal.

These reports add further credibility to the claims that Apple is about to screw Google over for iPhone search.

Previous reports had centered around rising tensions between Apple and Google in the past year. First, Google started to horn in on Apple’s burgeoning smartphone interests by releasing Android. Then, there was the Apple App Store debacle, where Google’s Voice and Latitude Apps weren’t allowed to be sold. Most recently, Google and Apple fought over a couple of acquisitions.

The question, though, was whether these considerations would really drive the two apart. Say what you want about Steve Jobs, but he’s still a practical man. There would have to be a good financial case for dumping Google in favor of a relatively underdeveloped competitor in Bing. This development makes these rumors seem much more plausible.

In addition, Bing’s actions seem entirely plausible given how aggressively Microsoft has been pushing the service in the past year. While they’re still completely overshadowed by Google and Yahoo in the desktop search arena, they’re steadily gaining ground. If they bought the exclusive rights to iPhone search, they could potentially win the loyalty of happy mobile Bing users.

As our own Alex Wilhelm said, “a search deal between Bing and Apple for the iPhone might be not just under discussion, but quite likely.” It will be very interesting to see if his projection is correct.