Google's 10-year run as Firefox's default search engine in the US is over. Yahoo wants more search traffic, and a deal with Mozilla will bring it.
In a major departure for both Mozilla
and Yahoo, Firefox's default search engine is switching from Google to
Yahoo in the United States.
"I'm thrilled to announce that we've
entered into a five-year partnership with Mozilla to make Yahoo the
default search experience on Firefox across mobile and desktop," Yahoo
Chief Executive Marissa Mayer said in a blog post Wednesday. "This is
the most significant partnership for Yahoo in five years."
The change will come to Firefox users in
the US in December, and later Yahoo will bring that new "clean, modern
and immersive search experience" to all Yahoo search users. In another
part of the deal, Yahoo will support the Do Not Track technology for
Firefox users, meaning that it will respect users' preferences not to be
tracked for advertising purposes.
With millions of users who perform about
100 billion searches a year, Firefox is a major source of the search
traffic that's Google's bread and butter. Some of those searches produce
search ads, and Mozilla has been funded primarily from a portion of
that revenue that Google shares. In 2012, the most recent year for which
figures are available, that search revenue brought in the lion's share
of Mozilla's $311 million in revenue.
Google now has Chrome, though, and it
doesn't have to share search-ad revenue from that browser with anybody
but itself. Yahoo, meanwhile, has ambitions to reclaim its former
prominence in Web search.
"At Yahoo, we believe deeply in search
-- it's an area of investment and opportunity for us. It's also a key
growth area for us," Mayer said. "This partnership helps to expand our
reach in search and gives us an opportunity to work even more closely
with Mozilla to find ways to innovate in search, communications and
digital content."
More flexibility in Firefox innovation
Mozilla wanted to move away from a
global search contract to one that offered more regional flexibility,
but the Yahoo deal also was motivated by Mozilla's desire to improve the
search experience for Firefox users, said Mozilla Chairwoman Mitchell
Baker. "They're open to innovations," she said.
That includes work on how Firefox's
"awesomebar" -- its combined address and search box -- retrieves data
both from people's own content and from what's available online. "Search
of external providers and search of our own stuff is closely related,"
Baker said. "There are lot of potential improvements there."
Negotiating with Yahoo was simpler than
with Google, Baker said. Google competes directly to try to lure users
to its own Chrome browser.
"When you have a partnership that has
competitive aspect to it, it does require a lot of time and attention
and focus," Baker said.
Mozilla was in a good bargaining position: search engines have been placing a higher value on its search traffic, Baker said.
"Both arrangements we were looking at
had very good economics," Baker said. "We're utterly confident in our
stability and viability going forward."
More search volume
Search volume is important to search
engines. The more that people search, the more opportunities advertisers
have to show ads, including ads associated with search terms that might
not otherwise be common enough.
Terms of the deal weren't announced. Firefox users will continue to be able to change their default search engine.
Still, Jan Dawson, chief analyst at
Jackdaw Research, thinks many Firefox users will not bother to change
the default settings. "Google should be concerned," said Dawson. "This
could mean a significant switch in market share away from Google toward
Yahoo."
Google didn't immediately respond to a request for comment.
Firefox was an early leader in building a
search box directly into the browser, but after a decade sending
traffic to Google, Mozilla concluded it was time for a change.
"Google has been the Firefox global
search default since 2004. Our agreement came up for renewal this year,
and we took this as an opportunity to review our competitive strategy
and explore our options," the organization said.
Mozilla has toyed with search-engine
changes before, for example with a dalliance with Yandex in Russia, by
setting Baidu as the default search engine in China and by making Bing,
from erstwhile rival Microsoft, another option.
Yandex back for search in Russia
The new deal with Yahoo is only one
change in which Mozilla will become more locally flexible, the nonprofit
organization said. Mozilla is keeping Baidu in China and switching back
to Yandex in Russia. Mozilla isn't actively looking at other search
changes right now, Baker said.
The Yahoo-Mozilla deal is an alliance of
underdogs. Mozilla's share of browser usage has been slipping in recent
months, and Yahoo is third place with 10 percent of US searches in
October, according to ComScore. For Yahoo, that was still enough for
quarterly search revenue of $450 million, after payments to the
affiliates that helped drive some of that search traffic. That was a 6
percent year-over-year increase, Yahoo said.
Yahoo sold off its search business to
Microsoft five years ago, and Microsoft powers Yahoo search results.
However, Yahoo keeps some of the revenue -- indeed, all of it for mobile
searches. Yahoo declined to comment on specific revenue share terms of
that deal.
"We are coming to the midpoint of the
10-year agreement" with Microsoft, Mayer said after reporting results
for Yahoo's fiscal third quarter of 2014. "We may want to contemplate
changes on both sides. So Microsoft has some rights at that point, so do
we. We're working through this with Microsoft."
Mozilla has been working with Yahoo for months on the partnership, and relations with Yahoo's new CEO has been good, Baker said.
"Marissa has a very strong product
focus, which is wonderful," Baker said. "Really having an executive who
understands the product experience, who's really engaged in it, has been
a real high point. We've been happy that Yahoo has gotten done the
things that said they would get done with us."
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