Video: Apple gets into the search game

In technology today, it feels as if every giant is expected to be great at any new piece of technology. Whether mobile, video services, email, music software — you name it — GoogleMicrosoft, and Apple are constantly fighting for a lead. In the following video, Motley Fool senior technology analyst Eric Bleeker explains how being a dominant platform allows companies to profit without the distraction of becoming a top dog in yet another field. Take Facebook and gaming, for example. By creating a platform for games and a payment system, the company is able to collect 15% of its sales from Zynga‘s efforts creating compelling games.

We’re now seeing a similar situation with Apple in search. Chinese search leader Baidu has been unable to gain traction with its own mobile operating systems. Instead, the company has begun offering a “cut” of search revenue to handset partners. The result is a default position in 80% of branded Android phones in China. Likewise, the company has now struck a deal where Apple receives revenues for searches on its devices.

Eric says this shows the power of Apple’s ability to leverage its strong negotiating position to collect revenues on a platform. While some investors have clamored for the company to take efforts in digital video — like buying Netflix — Apple’s position is much stronger staying neutral between content providers and creating the dominant television platform. Apple seems to be the only tech company to get the point, that sometimes less is more.

Apple and Baidu have teamed up to battle Google, but the fact is they’re all just pieces of the largest technology revolution in history: the mobile revolution.

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The Motley Fools purpose is to help the world invest, better. Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

A version of this article, written by Eric Bleeker, originally appeared on

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