[throw_awy_1]

In this case we have two ad supported search engines that deliver a very similar experience. As you note the differentiation is not great and thus, defaults matter. So in this case they are no longer competing on product quality, but on distribution. A high barrier to entry ($20B is high) but at <10% of Google's revenue it's affordable to them but basically no one else.

There is also brand competition and Google has done a fantastic job building very strong brand preference. Honestly no one has even tried to build an alternative search brand for over a decade in any meaningful way (DDG and Bing combined is the closest we could probably come and that's like Fresca competing with Coke).

Google Chrome has ~63% market share and that's not up for auction. They pay for ~23% or so at the $20B discussed thus no one is going to be able to out-distribute Google any time soon.

Furthermore no one, including Microsoft, is going to risk $20B on overcoming Google's brand preference. It would take years and probably $100B or more to play this game for an uncertain outcome. Better to invest in OpenAI than take that bet.

Credit to Google; they have built a very strong business with a strong moat. But no, real competition is not a "click away."

[crazygringo]

> So in this case they are no longer competing on product quality, but on distribution.

Incorrect. Quality is a moving target as search gets better. Competition is in quality and distribution. If Google stops improving and lets Bing move ahead on quality, it'll be dead. Witness the recent worries about incorporating LLM's into search.

> Furthermore no one, including Microsoft, is going to risk $20B on overcoming Google's brand preference.

Earlier this year there were reports that Samsung was considering switching to Bing, and it was suggested there was a similar $3B contract involved. So of course Microsoft is in the same game, and it's quite obvious that Google wouldn't be paying these sums at all if Microsoft weren't willing to offer something as well (but keeps getting outbid).

E.g. if Google weren't paying Apple $20B, it's quite likely that Microsoft would be paying Apple $15B instead. One of them would be.

[throw_awy_1]

Okay, they complete on quality but they are "close" to use your term.

My point was that paying to be the default is not enough. A challenger needs to also overcome the brand preference has built. A one-time investment of $20B (or even $3B) would be wasted. A true competitor would have to be in this for the long haul and willing to outbid Google for many years. Additionally they'd need to invest in building their brand image against Google which would be expensive and risky.

> Samsung was considering switching to Bing

Great case in point. Samsung (not Bing) backed out of this "over concerns of how it could affect its relationship with Google and the market’s perception of the move" [https://www.theverge.com/2023/5/19/23730368/samsung-google-b...]

Demonstrates that its not just money that is required to compete with Google.