In the world of commerce, most things ultimately boil down to market share and keeping ahead of the competition. Mozilla’s search deal with Google Inc. was coming to an end and there were some questions whether Google would renew their contract with the Mozilla foundation.
These questions have been answered today with confirmation coming that the two companies have reached a three year agreement. The deal is worth $900 million over three years or $300 million annually. As such, for the next three years, Google search will be the default option available on Firefox. The payment amount far exceeds what we have seen in past years and like all things, competition resulted in Mozilla getting the best deal for the search feature.
This time around, both Microsoft and Yahoo were interested in powering the search function from within Firefox. As we have known for some time, Microsoft is very anxious about shoring up their Bing search service and what better way to do this then to make a deal with Mozilla. Yahoo had also shown an interest in dealing with Mozilla, but their intentions were not so much to grow their search, but rather, it was to ensure that their market share did not dwindle any further. Unfortunately for Yahoo, the numbers that were being thrown around were just to rich for them.
In the end, it was Google that won out, but it did cost them. In 2010, Mozilla made $123 million in revenue, of which 84% was contributed by Google. We can clearly see with the $300 million/year number just how important it was for Google to retain this contract.