How Google Could Lose iPhone Search Traffic to Bing

Microsoft’s Bing will indeed gouge Google if Apple taps it to replace Google as the default search engine for its iPhone, according to a study by online ad network Chitika, which found that Google searches account for 50.5 percent of all Internet traffic on the iPhone.

Chitika Research Director Daniel Ruby called this a “stunning number, when you consider that it outnumbers the entire genre of non-search traffic,” meaning traffic from typing URLs directly into the browser and clicking links from sites that are not search sites.

Ruby said the results, shown here, indicate that the quickest way to browse using the iPhone’s Safari Web browser is by using the default search box at the top of the browser, which happens to be Google. This is because typing a full URL is a chore to smartphone users with a virtual keyboard.

The finding comes one week after BusinessWeek reported that Apple and Microsoft are discussing replacing Google with Bing as the iPhone’s search provider.

If this were to happen, pundits speculated, it would give instant mobile credibility to Bing, which with a near-11 percent market share appears harmless in the face of Google’s 65 percent share. That is, unless loyal Google users switched back to Google search when they jumped on the iPhone and found Bing there.

But not everyone will switch back, meaning Microsoft and Apple have a shot at displacing Google as the current flagpole sitter on the mobile Web. This would be a big blow to Google’s mobile advertising plans.

Google, which is trying to buy mobile ad provider AdMob, plans to plant many mobile ads and harvest a lot of cash. If Google isn’t front and center on the iPhone, it will need to find another device to set up shop on, ideally one based on its own Android platform.

After all, the iPhone is soaring in popularity, with Apple shipping 8.3 million units in the first quarter. Sales of Google’s Android smartphones have been good (Motorola Droid) or even modest (Nexus One). Ruby noted:

““If Google loses its status as the iPhone’s default search to Bing, that becomes a massive shift in mobile Web superiority. Although Google’s Android is growing its market share at a high rate, the iPhone still makes up 54 percent of the increasingly valuable mobile Web market.”“

Then there is Apple’s emerging iPad tablet PC to think about. If Apple bounces Google from the iPhone in favor of Bing, what is to stop it from promoting the same search engine on the iPad in March?

With $2 billion in profit from its recent fourth quarter and $24.5 billion in the bank, Google may not have to worry about money now. But will it still be able to say that in a few years if Bing supplants its search engine on the leading smartphone?

All of this raises the question: Can Apple and Microsoft, which also want to stake big claims on the mobile Web, afford not to strike a deal to get Google off the iPhone?