22 December 2011

Microsoft And Yahoo Tag-Team Bidding For Firefox Search Deal Pushed Google To Overpay For It

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Kara Swisher got a report that states Google will be paying up to $300 million USD to Mozilla PER YER for the next 3 years. At almost triple what Google was paying the past 3 years. All thanks to a bidding war with Microsoft and – surprisingly – Yahoo.

Google Will Pay Mozilla Almost $300M Per Year in Search Deal, Besting Microsoft and Yahoo 

WOW, yesterday i wrote a post in Google Plus talking about Mozilla and  the firefox search deal, and i feel the need to quote almost all of it, in the sake of context:

From what is buzzing, everything points out on Microsoft indeed doing a bid for Firefox search integration. No surprise there, as it was worth Microsoft's time to do so, even if just to show a kind hand to Mozilla and to keep Google paying high. If Mozilla managed to get one last nice deal out of Google, they only got Microsoft to thank for it. How ironic is that uh?

Also, i don't think Google really intended not to pay up and continue a deal with Mozilla. Dropping that deal would had meant Bing getting it. And considering that they still out bid Microsoft for the AOL deal. The idea of they effectively not caring about burning that last bridge with Mozilla and letting Bing get a lot more comfty with Firefox is something i found very hard to believe

The next 3 years still do look uncertain for Firefox. Now that Microsoft is activating IE AutoUpdating, Windows XP share decline continues to accelerate at the same time Windows 7 share growth continues to hold steady and Chrome For Android is looming closer

The chances of they just getting slammed out to a distant 3rd place in the browser race by Microsoft and Google look to be all high

And i knew i was right as i had followed the whispers in the net, sort of speak. But never ever expected that the bidding war for Firefox Search included Yahoo in it. And that this had forced Google to overpay for it. From what the Microsoft rumor mill was buzzing, the only i could gather was that Microsoft had indeed tried to get the Firefox deal. But never that they were also bidding against Yahoo, that it is Microsoft search partner!

Now the obvious question many will be having is: Why would Yahoo do that if it is powered by Bing?

For two simple reasons:

1.-Yahoo gets 80% of the pie right now from their Bing Powered Search. The more searches they get, the most money they can get out from Microsoft too.

2.-Brand Boost. Yahoo as the brand in Firefox would also mean Yahoo getting more visits to their portal, which in turns keeps them relevant and also making more Display Ad money.

But i bet Microsoft was not entirely happy to see Yahoo bidding in on the Firefox deal. Until/Unless that after awhile they had realized Google was willing to pay anything. A realization that must have come up quickly enough and by then they were just happy to make Google spend a lot more. Even if that meant neither Bing or Yahoo would get the deal.

The whole thing is certainly an amazing development for Mozilla. And i will correct what i said yesterday. If Mozilla got someone to thanks for being able to live and fight for another 3 years, is to Microsoft….. and Yahoo. Is not that something?

And live and fight, Mozilla will now can. With that serious budget boost. I just hope that they realize that what they need to do  is to start developing more apps like Firefox Sync. and push them over all the OSes around. Apart from accelerating their Firefox Mobile development in Android.

In respect of Google, they have now overpaid for both the AOL and the Firefox deals to keep them out of Microsoft hands. The next deal they could be overpaying for is probably the iOS search deal. Will they? Will Apple let them? Those are now the questions.

Source: All Things D

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