# United States v. Google/Findings of Fact/Section 2E

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​E. The Expense of Developing and Maintaining a GSE
50. Constructing a GSE is an extremely capital- and human-resource intensive endeavor. See id. at 4765:17-20 (Whinston); id. at 3700:14-16 (Ramaswamy) (describing the ​building of a search index as a “Herculean problem”). Developing just the technical infrastructure alone requires billions of dollars. Id. at 1651:12-25 (Roszak).
51. A competitive analysis performed by Google illustrates the point. In late 2020, Google estimated how much it would cost Apple to create and maintain a GSE that could compete with Google. Google “estimate[d] that the total capital expenditures required [for Apple] to reproduce [Google’s technical] infrastructure dedicated to search would be in the rough order of $20[ billion].” UPX2 at 392–93; Tr. at 1644:8-20 (Roszak). Google further estimated that, if Apple needed only half of Google’s infrastructure to produce a competitive GSE, it would have to spend $10 billion to get it off the ground, plus $4 billion annually in technical infrastructure. UPX2 at 393. On top of that, if Apple could sustain a business with only one third of Google’s engineering and product management costs, it still would cost Apple $7 billion annually. Seven billion dollars was equal to more than 40% of Apple’s total research and development expenditure in 2019. Id.
52. The cost of maintaining a fully-integrated GSE once built runs into the billions of dollars. In 2020, Google spent $8.4 billion to operate its search engine (excluding revenue share payments). This expense is attributable to a variety of inputs. By way of example, the “petabytes” of user data that Google maintains are “expensive to store[.]” Tr. at 7824:2-3 (Fox); id. at 6337:2021 (Nayak) (“[T]he cost of processing the data goes up if we’re talking about large amounts of data.”). Certain highly effective ranking mechanisms, such as artificial intelligence-driven models, are computationally more expensive than others because they are costly to train and require significant engineering capabilities. See id. at 1931:17-20 (Lehman); id. at 6447:11-16, 6452:1-8, 6452:15-19 (Nayak); id. at 8278:15-18, 8281:13-24 (Reid).
​53. Adding features to the SERP also dramatically increases costs. UPX266 at 985 (explaining that “[f]eatures are even more incrementally expensive,” such as including web search and video search on a single SERP, which costs about five times more per query than web search alone). There are many other contributing costs.
54. Apple itself has estimated that it would cost $6 billion annually (on top of what it already spends developing search capabilities) to run a GSE. Tr. at 2295:9-16 (Giannandrea); UPX460 at 177.
55. But building and maintaining a GSE is only half of the cost equation. Monetizing a GSE is also an expensive proposition. In 2020, Google spent $11.1 billion to operate its search ads business. By comparison, it spent $8.4 billion on search (excluding revenue share payments). Tr. at 4764:12-20 (Whinston) (discussing UPXD102 at 52). In 2020, Bing earned only $7.7 billion total in search ads revenue. Id. at 4765:4-6 (Whinston) (discussing UPXD102 at 52).
56. As result of the extraordinary resources required to build, operate, and monetize a GSE, venture capitalists and other investors have stayed away from funding new search ventures. Id. at 2261:11-19, 2268:6-7 (Giannandrea) (stating that “a startup could not raise enough money . . . to build a very good, large-scale search engine” because “to build a competitive project is very expensive”); UPX240 at 507 (internal Apple document written by Giannandrea stating that “the reason a better search engine has not appeared is that it’s not a [venture capital] fundable proposition even though it’s a lucrative business”); Tr. at 3510:24–3512:7 (Nadella) (describing Silicon Valley’s view of venture funding of search as the “biggest no fly zone”).
57. New investment has not poured in despite the promise of high profit margins in general search. See UPX635 at 352 (Apple executive noting that “there aren’t so many businesses ​on the planet that have such high marginal profit on incremental revenues”); FOF ¶ 8 (describing Google’s revenues).