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Mozilla tells Google, it's not you (anymore), it's Yahoo

Gregg Keizer | Nov. 21, 2014
Analysts counter Mozilla's ideological explanation, see money behind Firefox's default to Yahoo.

Thompson was certain that for all of Beard's ideological rationales, dropping Google and, in the U.S., picking Yahoo, was really about dollars and cents.

"Total bullshit. This was clearly all about the money," Thompson said of third-party commentary that put the decision down to dogmatic differences between Mozilla and Google.

Other takes were more nuanced. Jack Dawson, principal analyst at Jackdaw Research, saw elements of both philosophy and finance in Mozilla's decision. "It would not have walked away from Google absent interest by others," Dawson said in an interview today.

Mozilla's choice of search partners was important because of the unusual way the non-profit generates the bulk of its income. In 2012, the last year for which Mozilla has reported its finances, search-generated revenue accounted for 98% of the total. Most of Mozilla's income -- 88% -- came from the Google deal, which provided $274 million of the total $311 million.

According to Dawson, the money Google paid to Mozilla in 2012 was about 12% of the former's total traffic acquisition costs from distribution partners. Traffic from Firefox produced billions in Google revenue; by one rough estimate based on financial records, Google generated more than $4 billion from Firefox-originating traffic.

But Mozilla's contribution may have been less attractive to Google over time as Firefox's share of all browser users has declined -- according to metrics firm Net Applications, Firefox's desktop user share has fallen 37% since the late-2011 contract the two signed. And Mozilla has an almost invisible user share on mobile, even though it distributes an Android browser and has launched Firefox OS, a free mobile operating system.

In the meantime, Google has seen its user share of Chrome on the desktop and in mobile climb organically: Chrome's desktop share rose 17% since November 2011, when it and Mozilla struck their last three-year deal.

In other words, it's possible that Google was the party that bailed out, even though Mozilla claimed it was the one to walk away. "We have decided to not renew our agreement for global default placement [with Google]," Beard said Wednesday.

And Yahoo may have been the only alternative, as unlike Google and Microsoft, which both have browsers of their own and search engines, Yahoo lacks the former, reducing partner friction. "I suspect Mozilla might have been willing to accept the same or slightly less from Yahoo," said Dawson.

That's why some pundits have characterized the Mozilla-Yahoo marriage as one of the weak. "Given Yahoo's search share of 9% in the U.S. and Mozilla's [global] share of 14%, and the reluctance of people to change defaults in their browsers, Yahoo should probably see increasing share from this," said Dawson, betting that there was currently little overlap between the two. But he didn't see the potential gains as significantly changing Yahoo's position in search, or for that matter, Mozilla's shunning of Google impacting that firm's share.


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