Google strikes search-engine deal with Mozilla
Mozilla Corp. rolled out a major update to its Firefox web browser on Tuesday with a bevy of new features, and one old frenemy: Google.
In a blog post, Mozilla said Firefox’s default search engine will be Google in the United States, Canada, Hong Kong and Taiwan. The agreement recalls a similar, older deal that was scuttled when Firefox and Google’s Chrome web browser became bitter rivals. Three years ago, Mozilla switched from Google to Yahoo Inc. as the default Firefox search provider in the United States after Yahoo agreed to pay more than $300-million (U.S.) a year over five years – more than Google was willing to pay.
The new Firefox deal could boost Google’s already massive share of the web-search market. When people use Firefox, Google’s search box will be on the launch page, prompting users to type in valuable queries that Google can sell ads against. But the agreement also adds another payment that Alphabet Inc.’s Google must make to partners that send online traffic to its search engine, a worrisome cost for shareholders.
It’s unclear how much Google paid to reclaim this prized digital spot. A Google spokeswoman confirmed the deal but declined to comment further, and Mozilla didn’t disclose financial details.
As Google’s ad sales keep rising, so too has the amount it must dole out to browsers, mobiledevice makers and other distribution channels to ensure that Google’s search, video service and digital ads are seen. Those sums, called Traffic Acquisition Costs or TAC, rose to $5.5-billion during the third quarter, or 23 per cent of ad revenue.
Last quarter, the increase in TAC was primarily due to “changes in partner agreements,” Google chief financial officer Ruth Porat said on the earnings call. She declined to disclose specific partners. A lot of these payments go to Apple Inc., which runs Google search as the default on its Safari browser. In the third quarter, the TAC Google paid to distribution partners, such as Apple, jumped 54 per cent to $2.4-billion.
Google is likely paying Mozilla less than Apple for search rights. In 2014, Yahoo’s then-chief executive officer, Marissa Mayer, lobbied heavily for the Firefox deal by agreeing to pay $375-million a year, according to regulatory filings. Google paid $1-billion to Apple in 2014 to keep its search bar on iPhones, according to court records.
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Google, whose headquarters in Mountain View, Calif., are seen above, could boost its already massive web-search market share with a deal to make the platform Firefox’s default search engine.