Earlier this week, Google and Mozilla said they had struck a deal to renew their search royalty agreement for another three years.
What the pair declined to add: The search giant will pay just under $300 million per year to be the default choice in Mozilla’s Firefox browser, a huge jump from its previous arrangement, due to competing interest from both Yahoo and Microsoft.
Sources said this total amount — just under $1 billion — was the minimum revenue guarantee for delivering search queries garnered from consumers using Firefox.
Google’s main rival in the bid, sources said, was Microsoft’s Bing search service, which was aggressively trying to hip-check it from the main search spot on the browser.
That’s because the software giant has been spending a lot of money in efforts to grow Bing’s market share in the search market.
Microsoft, of course, also owns the still-dominant Internet Explorer browser, but Google’s Chrome has recently been making major gains over both IE and Mozilla’s Firefox.
Still, Mozilla’s recent negotiations with both companies was about search market share.
Yahoo was also in the mix, even though Microsoft powers its search technology, because a hookup with Firefox was considered a plus in holding on to its declining search market share.
But the deal, which was being pushed hard by Yahoo’s Chief Product Officer Blake Irving and its search head Shashi Seth, was determined to be too costly for Yahoo.
Costly indeed, since the new price is much higher than Google had previously ponied up to Mozilla. In 2010, Google contributed 84 percent of Mozilla’s $123 million in revenue.
A previous version of the partnership had expired at the end of November, and the new talks were done against a backdrop of simmering tension between Google and Mozilla over Chrome.
As Liz Gannes wrote earlier this week:
Since the first search royalty deal was signed in 2008, Google’s own Chrome browser has become a significant competitor. Just last month, Chrome overtook Firefox in global usage for the first time, according to StatCounter. Both browsers — software which is used to navigate the Internet — have about 25 percent market share.
Even with the new default deal with Google, Mozilla still also has partnerships with other search providers, including Bing, Yahoo, Yandex, Amazon and eBay.
Of course, everybody declined to comment on my queries to hand over all the financial deets stat.
But Google’s SVP of Search, Alan Eustace, said in a statement: “Mozilla has been a valuable partner to Google over the years and we look forward to continuing this great partnership in the years to come.”
Great, perhaps, but also much more expensive — so presumably Firefox is worth it.
source
