Engineers for Google (NASDAQ:GOOG) and Mozilla's desktop browser teams lashed out at media reports that questioned the companies' renewed deal to put Google search in the Firefox browser toolbar.
Google and Mozilla renewed their deal to feature Google as the default search provider for the Firefox toolbar Dec. 20. Google pays Mozilla a portion of ad revenue generated from those searches.
Google and Mozilla both declined to provide financial terms of the new arrangement due to confidentiality agreements the companies inked. AllThingsDigital said the deal was worth $300 million a year for at least the next three years, valuing the deal at $900 million.
This sum, if true, is worth more than three times more on an annualized basis than the previous arrangement Google and Mozilla forged, when Mozilla reported earning nearly $100 million of its $123 million in 2010 revenue from its deal with Google.
Google clearly paid a premium to keep Mozilla from making Microsoft Bing or Yahoo its default search provider. What makes the deal particularly intriguing is that Google's Chrome Web browser has made huge market-share gains in just three and a half years since it launched, growing to 19 percent while Firefox has fallen under 22 percent, according to the latest Net Applications numbers.
TechCrunch blogger-turned venture capitalist MG Siegler expressed surprise that Google would pay that much money to fund a competitor: "One thing is certain: Google is not paying Mozilla a billion dollars out of the kindness of their hearts. Doing so would be irresponsible to their shareholders. Again, they're paying all that money to a competitor."
This sentiment, echoed by other journalists, elicited some commentary from key Chrome and Firefox browser engineers.
Peter Kasting, who Google hired to work on Firefox before the company built Chrome, argued that Google is funding an open-source partner to help advance the Web, both in introducing a faster browser and spurring browsers, such as Firefox, Microsoft (NASDAQ:MSFT) Internet Explorer and Apple (NASDAQ:AAPL) Safari, to get better.
"It's completely irrelevant to this goal whether Chrome actually gains tons of users or whether, instead, the Web advances because the other browser vendors step up their game and produce far better browsers. Either way, the Web gets better. Job done. The end," Kasting wrote on Google+ Dec. 24.
"So it's very easy to see why Google would be willing to fund Mozilla: Like Google, Mozilla is clearly committed to the betterment of the Web, and they're spending their resources to make a great, open-source Web browser.