Google spends a total of $19 billion each year on what it calls “traffic acquisition costs”.
Most Android smartphones come pre-installed with a full suite of Google apps, whether it is Drive, Docs, Sheets, YouTube, Duo or the Google Photos app. Some may see it as convenient, and some may see it as a clutter, but did you ever wonder why this set of app always exists on a new Android smartphone? Well, it’s because Google pays for it.
Reportedly, in 2016, Google paid out $7.2 billion to OEMs so that these applications are included on their devices. Basically, each year, Google pays Android OEMs for features such as search bar placement and pre-loaded Google apps like YouTube and Chrome. In fact, Google also pays Apple to be the default option for built-in web search boxes on Safari. Google calls this cost “traffic acquisition costs”, for which the company pays $19 billion each year. This cost has been seen increasing year by year.