Mozilla Takes $300M Gamble on Yahoo to Reassert Its Independence

NEWS ANALYSIS: Mozilla shifts its search allegiance from Google to Yahoo. What is the impact for its Firefox browser, users and the big money behind it all?

Mozilla Yahoo

In a surprise move late on Nov. 19, Mozilla and Yahoo jointly announced a five-year partnership that will see Yahoo Search become the default search engine in the open-source Firefox Web browser. The Yahoo partnership marks the end of a decade-long partnership that Mozilla had with Google that paid it hundreds of millions of dollars in royalties per year, helping to fund Mozilla's development and overall operations.

The Google-Mozilla partnership was last renewed in 2011 and was set to renew again by the end of this year.

While considering the Google deal renewal, Mozilla also considered other strategic options, including a deal with Yahoo. Full details on the new Yahoo deal are not being publicly revealed. What is known is that Yahoo will be the default search engine for Firefox users in the United States. The Yandex search engine is set to become the default search engine for Firefox users in Russia, and Baidu will become the default search engine for Firefox users in China.

A Yahoo spokesperson told eWEEK that the partnership with Mozilla is a revenue-sharing agreement and includes certain guarantees. Beyond that, the terms of the deal are confidential. Along with Mozilla leveraging Yahoo as its default search provider, the agreement provides a framework for exploring future product integrations, the spokesperson noted.

Mozilla was similarly nonspecific about the terms of the new deal with Yahoo.

"The specific terms of this five-year commercial agreement are subject to traditional confidentiality requirements, and we're not at liberty to disclose them," Denelle Dixon-Thayer, senior vice president of Business and Legal Affairs at Mozilla, told eWEEK. "It is a revenue-sharing arrangement."

Dixon-Thayer added that Google will remain a search option for Firefox users, and Google will continue to power the Safe Browsing and Geolocation features of Firefox.

Mozilla's relationship with Google has been a question mark for the last several years as competition in the browser world has increased.

Google first introduced its Chrome browser back in 2008, and its popularity has been growing steadily ever since. Statistics from W3Schools for October 2014 show Chrome to be the most widely used browser in the world at 60.4 percent, while Firefox is the second most popular at 23.4 percent.

Money—and Lots of It

Mozilla's partnership with Google garnered it hundreds of millions of dollars over the last decade. Early on in the Google partnership, back in 2005, Mozilla reported total revenue of $52.9 million. The most recent Mozilla financial statements from 2012 indicate that Mozilla generated $311 million in revenue that year. Of that amount, $305 million came from royalties. According to Mozilla's 2012 financial statements, "Mozilla receives royalty income from contracts with various search engine and information providers."

Sean Michael Kerner

Sean Michael Kerner

Sean Michael Kerner is an Internet consultant, strategist, and contributor to several leading IT business web sites.