Mozilla Takes $300M Gamble on Yahoo to Reassert Its Independence
While Yahoo and Mozilla are not providing a breakdown of the revenue-sharing arrangement, there is some historical context to help illuminate the issue. Mozilla's 2012 financial statements note that revenue from its search engine contracts is determined by search and end-user activity. In a 2007 article, I speculated on a formula for how the search revenue is determined. Over the last seven years, neither Google nor Mozilla has ever challenged me on the story, or its funding analysis. In the Firefox browser, there is a search dialog box that users can use to search, and there is also the default home page. Both the default home page and search dialog box currently provide Google as the search engine. My speculation analysis was that Google paid Mozilla as much as 5 cents and as little as a penny per search query that came from the default home page or search dialog box. Simply put, Firefox has hundreds of millions of users, many of whom don't customize their browser or change the default options. As such, Firefox has the potential to drive a nontrivial amount of search traffic volume to its preferred search provider. That preferred search provider in the U.S. is now going to be Yahoo.Even before the new partnership was formally announced on Nov. 19, Yahoo has been offering, for the last several years, its users a special version of Firefox, optimized for Yahoo. The new deal with Yahoo has triggered a change in Yahoo's privacy stance as well. This past May, Yahoo announced that it was dropping support for the Do Not Track (DNT) standard. DNT is a technology that Mozilla and other browser vendors support that aims to give users a choice to opt out of Website tracking. DNT, however, requires that Websites, like Yahoo, actually honor the DNT request. As part of the new Mozilla partnership, Yahoo has now pledged that it will in fact support DNT in Firefox. Mozilla breaking away from Google makes a lot of sense. Google has its own successful browser now and is increasingly optimizing its own sites to work on Chrome. While Mozilla Firefox and Google Chrome developers sometimes can collaborate on Web standards, it's important that Mozilla does not feel any external pressure to collaborate due to a financial partnership. Mozilla is also increasingly at odds with Google on mobile efforts. Mozilla has been pushing its FirefoxOS mobile strategy as being transparent and a more open approach than Google's Android. With this new deal, Mozilla is reasserting its independence, both as an open-source browser vendor and an organization. It's an important step for Mozilla as it enters a new era, where Microsoft is no longer the primary rival. It's an era where Google, the company that helped to fund Mozilla's growth for the past decade, has become a competitive target on the desktop and on mobile. There is always risk with change. Given that the new deal is a five-year partnership, I suspect there is a lot of runway for both Mozilla and Yahoo to amortize that risk and build a successful partnership for both organizations. Sean Michael Kerner is a senior editor at eWEEK and InternetNews.com. Follow him on Twitter @TechJournalist.
It's important to note that while Mozilla has a default search provider, users can choose at any time to change the default to any search engine they want. It's also important to remember that this isn't Mozilla's first attempt at working with Yahoo either.