Safari for Windows: All about the money?

Browser makers have revenue sharing deals with search engines, says Fireball's John Gruber

The debate is still on about why Apple decided to develop a version of its Safari browser for Windows.

One of the most popular ideas online -- though one that doesn't appear to be widely supported in the analyst community -- is that Apple hopes to use its age-old rival, Microsoft, to boost its revenues.

Offering Safari to Windows users could significantly increase the number of Safari users, and that larger user base could translate into revenue for Apple because some browser makers have revenue sharing deals with search engines, says John Gruber, writer of the popular Daring Fireball blog. Search providers like Google reportedly split with browser makers the advertising revenue generated when browser users type search terms in the bar embedded in the browser.

Gruber's suggestion has spread wildly across the Web, with bloggers and mainstream publications as far flung as the BBC picking up on the idea.

It's difficult, however, to confirm Gruber's suggestion.

Google declined to comment on any such arrangements that it might have with browser partners. Mozilla, however, has said that it earns a significant portion of its revenue from the search bar in its browser. In its official company blog, Mozilla's CEO Mitchell Baker wrote last year: "We are very fortunate in that the search feature in Firefox is both appreciated by our users and generates revenue in the tens of millions of dollars." Firefox comes with Google as the default in the search bar and users can change that to five other options including Yahoo and Answers.com.

Mozilla didn't respond to additional questions about how exactly it earns revenue from the search bar. Apple did not reply to questions about a potential revenue share with search providers. Safari users can choose Yahoo or Google to run the search bar.

Microsoft doesn't have any kind of compensation deals with search engine providers or other browser makers based on users who set Windows Live Search as the default search engine or based on users who set other search engines as the default in Internet Explorer, a company spokesperson said.

Google could very well have a similar deal with Apple as it may have with Mozilla, said Michael Gartenberg, an analyst at Jupiter Research.

Still, he doubts that revenue from the search bar is the primary reason Apple developed Safari for Windows. "Whatever incremental revenue they'd get is almost irrelevant for a company of Apple's size," he said.

Instead, Apple has a stake in making sure that Safari has strong support in the market from users and developers because it is a critical piece of the Mac OS and will serve as the primary application development environment for the iPhone, he said.

Revenue from the search bar could play a role in the reason behind making Safari for Windows but it's probably not the primary one, said Danielle Levitas, an analyst at IDC. "I think the revenue is not insignificant," she said. "Maybe it's the tactical reason but the strategic initiative is more about the connected device vision and using the browser to deliver Web-based applications." Apple appears to be trying to position itself so that it can control Web access in a variety of devices, including phones, televisions and computers, she noted.

The move to Windows could encourage the development of more attractive applications built on Safari because developers will be able to create applications on Safari that can reach Mac and Windows users as well as the iPhone, Van Baker, a research vice president at Gartner wrote in a blog posting on Friday. He doesn't mention the potential revenue gain as a reason.

Whatever the reason, Apple has already learned that Windows users are interested in Safari. On Thursday, Apple said that 1 million copies of the Safari for Windows beta were downloaded in the first 48 hours after it became available.

Safari has around 5 percent of the browser market share, compared to Microsoft's Internet Explorer's 78 percent and 15 percent for Mozilla's Firefox.

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