Slashdot Mirror
Did Microsoft Make Google Pay Triple Rate To Mozilla?
SharkLaser writes "Last week it was announced that Google has renewed their search deal with Mozilla. The amount Google paid to Mozilla was surprising: $300 million per year, despite the slightly falling market share of Firefox. Many took this as charity, and for the purpose of advancing the web. Now sources in the bidding process have revealed that Google's main rival in the bid was Microsoft's Bing, along with Yahoo. This bidding war was costly to Google, which is now paying 300% of what they used to, just to be Firefox's default search provider. Mozilla veteran Asa Dotzler is also giving insight into the deal between Google and Mozilla. 'Google started out as a search company. But that's not what they are today. Google's primary business is advertising. Google brought in $9.7B in revenues in Q3'11. 96% of that revenue was from ad sales. Not all traffic to Google ads is 'organic' though. To help drive ad sales, Google pays for traffic to their ads. They paid out $2.21 billion, or 24% of their ad revenues in 'Traffic Acquisition Costs.' That money goes to revenue shares with their AdSense partners and to 'distribution partners' — presumably browser makers, PC OEMs, and mobile OEMs and operators.' Google also pays shareware and freeware distributors to bundle Chrome and Google toolbar with their programs and games."
Which is absurd. Chrome and Firefox are competing for the same users. Chrome helps Google display ads by directing users to Google services, such as with searches in the address bar. Google and Mozilla are competitors. Remember, you are the product, and advertisers are Google's customers.
David Ulevitch, founder of OpenDNS, had a more likely hypothesis, which is that Google is protecting itself from increased antitrust scrutiny. Remember that they often display a message on Google.com trying to convince people to download Chrome. Along with Android, Google needs to appear like it's not too dominant.
Peter Kasting at Google posted a response, but it focused on claims about Google killing Firefox and didn't actually contradict Ulevitch's thesis on why they paid so much to be Firefox's default search provider. Firefox usage is falling because of Chrome, so it's not like Mozilla (a non-profit) is best pals with Google (a for-profit, multibillion-dollar advertising megacorp). And Mozilla has questioned Google's motives in the past over their refusal to implement Do Not Track in Chrome when all the other major browsers committed to it.
It's like how Microsoft keeps releasing Office for Mac and various other utilities to make sure the Mac is out there just enough to keep antitrust regulators off its back.
No, you're the product.
Deleted
This is free-market capitalism working. Supply is constant (there's only one Firefox), but demand increased (Bing wanted in on the traffic). Therefore prices increased.
And it's even good for the consumer. "Default search provider" can't really hurt the consumer, as long as they're free to change it (and they are). Meanwhile, this provides funding to one of the few open-source brands. Firefox isn't just a browser - it managed to build a respect and legitimacy as a product in a world dominated by closed-source, and it built that legitimacy with regular desktop users, not IT people. Mozilla could make a music e-store, or a netbook line, or an operating system, and it would share that perception of legitimacy, of the brand identity. Not many open-source non-profits can say the same.
Keeping an open-source brand alive is worth it.
"'Google started out as a search company. But that's not what they are today. Google's primary business is advertising."
Funny, I thought they were always an advertising company. The last time it wasn't, to my knowledge, was when it was still hosted at Stanford.
Literally 97% of Google's revenue comes from web advertising. They're not a search company; the search engine is just one of many mechanisms for displaying ads.
Did MS make them pay triple? Yup! MS could have actually gained some geek-cred paying Mozilla, in addition to getting searches.
I hope they spend most of this money making Web to Gecko a great OS!
Democracy Now! - your daily, uncensored, corporate-free
If I'm the "product," wouldn't that mean I'm entitled to some form of compensation (preferably monetary)?
An enigma, wrapped in a riddle, shrouded in bacon and cheese
Does this mean we will see even more major Firefox versions in 2012? Or, will Mozilla beef up its graphics design staff and add even more eye candy???
Is why Firefox doesn't have all it's problems worked out with an operating budget of at least 100 million dollars a year, one would hope that with an additional 200 million dollars a year, they will really start making heads turn towards, and not away from, their product.
Yes it is. 50% of 100 million is 50 million, 100% of 100 million is 100 million, and 300% of 100 million is 300 million. "Of" in this context means multiplied by.
Perhaps you're confused by "300% of" as opposed to "increased 300%"? - it's a 200% increase, or 300% of the original value.
My point is there's nothing wrong in serving ads for things that people are looking for.
Whoa, an AC that actually has a good point. I stand amazed.
Though they're a bit of a douche, aren't they?
All the world's a CPU, and all the men and women merely AI agents
Google is paying so much to be default search machine. And the first thing I do with a new FF installation is to remove it and replace it via 'Add To Search Bar 2.0' with DuckDuckgo and Dogpile. But hey, at least I am still using google. Indirectly.
Actually I'm pretty sure it is. They didn't say "300% MORE than they used to", which would have been wrong. 50% of $100m is $50m, 100% of $100m is $100m, 200% of $100m is $200m, and so on.
In fact, Wolfram Alpha confirms it!
---- Den ene knappen er powerknapp, den andre er Bender voice knapp "Bite My Shiny Metal Ass"
I made a comment talking about how this was likely just a few days ago.
My point was the platform brings a lot of eyeballs, and has a value on that merit alone. That value has now been placed at 300 million dollars. Conspiracy theorists need to get a grip and remember that most things have simple explanations.
Firefox can't be bought or otherwise buried. However they can be joined, and there is nothing wrong with their doing so.
When was the last time you installed / upgraded IE... it prompts to set defaults to all Microsoft or "Allow me to select my own defaults"... selecting the 2nd option opens a tab for each "accelerator"... from there Google is really easy to select for search, blogs, email, etc. It's been that way since IE8 and the massive anti-trust lawsuits in Europe.
It would be interesting to know if this were true, not as a percentage of the market but in terms of total volume (number of users, number of searches done using Firefox, ie something actually somewhat relevant to how Google derives revenue).
People seem to focus a lot on market share but I think it's a largely irrelevant metric for doing anything other than cheerleading. After all, you can apparently run a viable business based on a single digit browser market share. Given the astonishingly large number of people using the web this shouldn't be surprising but people seem to look at the percentages and forget the volume.
300 million sounds like a lot of money (because it is!) but it would seem to be less than a dollar per Firefox user per year. Would Google expect to derive more than a dollars worth of revenue per user over a year on average? It doesn't sound like a fundamentally unreasonable proposition (and Google should have the metrics to know, it would not be much of a gamble for them).
Boffoonery - downloadable Comedy Benefit for Bletchley Park
Google has a revenue of sth like 30Billion/year. 60% of that is on their websites and i presum something like 40% comes from firefox users, which (according to my habit) mostly comes from the built-in search. Now lets say 50% of the revenue on the google websites is search-related. That makes 12% of 30Billion$ which could be lost. Lets say half of the people åre too lazy to change the default search engine, so we are talking about a loss probably larger than 1.5 Billion.
So paying 300Million seems a reasonable decision to me.
Good lord.... once again Slashdot is full of ignorant MS bashers. "Durrr Google doesn't lock you in.... BUT MS DOESN'T ALLOW YOU TO USE GOOGLE IN IE!!!!11"
Nope.
Want to set Google as IE's default search provider? Enter something into the address bar and notice the dropdown list of suggestions that starts to appear. Notice the search provider icons at the bottom. Select the big "G".
There - you have now set Google as the default provider.
Next time try not to be an ignoramous who bashes MS at every turn.
At 1 million $ per version, I expect to see atleast 300 google sponsored revisions of Firefox in 2012.
I don't think that's accurate. What would be more accurate is that many media outlets have misrepresented various Googler's comments that what Google pays Mozilla advances Google's interest in the open web, and that that is one reason why Google would continue to funnel lots of money to Mozilla even though it has its own browser which competes directly with Firefox as a claim about "charity".
That claim has nothing to do with charity, its a statement that is about revenue -- largely ad revenue, but also revenue from Google's other services -- because the more happy people are with doing things on the web (whether new things or things they previously would use desktop apps or non-web technologies for) the bigger the market is for online advertising, web application hosting, and all kinds of other services Google provides for a price. And the more the web uses open standards to do that, the more Google's various services that rely on scraping, analyzing, and summarizing data from across the web can do.
There's also, of course, the direct search ad revenue that Google derives from use of their products in search, which is the most direct and visible reason they would pay Mozilla to be the default Firefox search provider. And of course that's important, too. But their strategic interest in making the web friendlier to promote their whole host of services (which is still mostly advertising, but not all of that advertising is search advertising) is why they are consistently willing to pay more to be the default search provider in Firefox than Microsoft, for whom promoting the open web isn't a strategic interest in the way it is for Google. Because Google sees a return beside the direct search revenue that Microsoft doesn't, because Google's long-term business interest are more closely aligned with Mozilla's ideological interests.
If you thought that was a lot, wait until you see what Google will have to pay for primary placement in Safari. I don't recall when that deal is up, but you can bet that Apple is going to be all too happy to stick it to Google for pilfering the iphone design for use in Android hardware.
Apple has a tremendous thing going with iPhone and IPad sales. They're none to happy that Google is trying to rock that boat. I expect Apple to force Google to pay dearly for placement, Apple will be just as happy to switch to Bing.
btw, if you thought Bing's existence was a waste of energy, it was built for exactly this kind of forcing costs up on competitors. It doesn't have to be widely used, it just has to be a credible threat so Google is forced to pay more than it otherwise would have.
Does a surprise increase of 300% to Mozilla mean that they are going to be able to hire more developers, and build/iterate faster?
--
$tar -xvf
Also, does anyone else think it's anticompetitive for a company with monopoly share to PAY people to use their services?
Well, its anticompetetive to let everyone *except* them pay to use the service. By your argument, if Google didnt bid then Microsoft would be underpaying for Firefox which would be proof of Microsofts harmful monopoly. If everyone is free to bid, no monopoly, and no one underpaid anyone.
they purchased Java products and companies in bidding wars with Sun and Netscape only to shut them down. ie they were purchased at a high cost to get useful Java apps and tools off the market. As for Google, they benefit from an open market and not a closed Microsoft or Apple market. And we benefit from that too.
LoB
"Anyone who stands out in the middle of a road looks like roadkill to me." --Linus
You're right, that is exactly what happened. Silly me!
they competed with Microsoft to fund Firefox, a free browser which runs on arguably ALL platforms. WTF are you crying about.
Do you really think that it would have been better to let Mozilla be beholden to Microsoft? As if there isn't reams of court docs which show they would likely try to make it only run on Windows.
I would rather Google be there than Microsoft since Google got where they got in the search engine biz by being better than everyone else. If Google had even a pinch of the history Microsoft has I would be saying this agreement with Mozilla was bad for users but they don't and the Google search engine is still quite good.
LoB
"Anyone who stands out in the middle of a road looks like roadkill to me." --Linus
Only until the next time you upgrade your machine. I have deleted the Bing search and set Google to be the default, yet Bing keeps getting reinstalled and set as the default for all my users every time there is an update to IE. This keeps confusing a great deal of my users due to the fact that Bing doesn't even come close to giving good results as google does.
Quit playing Monopoly with Bill.
Linux - of the people, by the people, and for the people.
It happens to us all at times :)
I dunno, at my last job I had to do a number of "rebuilds" as they called it on machines from XP to Win7 and IE 8/9 would always pester me to do the initial preference setup, but whenever I tried (just for grins) the link took me to an incomprehensible mess of an "app store" and it was up to me to dredge Google from the morass.
I could never quite tell if it was Microsoft being underhanded and hiding the other options, or just plain old fashioned incompetence, by which I mean plain old fashioned Microsoft-ness.
The only reason I even started IE in the first place was to replace it, so I usually just said "Remind me later" or whatever the relevant option is.
Celebrity worship is a poor substitute for Deity worship and costs more to boot.
No they wouldn't. Bing got popular because it's the default in IE, and statistically speaking nobody bothers switching away.
Especially not now that MS had made it so hard after IE9 came out - you have to dig through a fuckton of minor search engines to find the one for Google, which they can get away with because they put them in alphabetical order.
You may argue "but idiots don't use Firefox!", except thanks to us /they do/. We've put it on our parents' computers and told them to use it instead of IE, to protect the computer.
Hail Eris, full of mischief...
E pluribus sanguinem
Percentages are stupid measurements to use when 100% doesn't relate to some fundamental whole of which you are indicating a ratio of. I can't imagine what could lead someone to write:
rather then
other than disregard for the reader.
Boffoonery - downloadable Comedy Benefit for Bletchley Park
Once upon a time, search was an expensive, high-end service, sold by companies like Nexis/Lexis and Mead Data Central. Then it looked like search might be something you paid for with your ISP bill, like premium cable. Then it was free, supported by ads, but users had go to to the search site. Search engines competed on search result quality, which is how Google beat Lycos, Yahoo, and AltaVista. Now Google has to pay cash for traffic flow. Search now has negative market value.
This is striking. TV networks have never had it that bad. US cable networks pay for their channels, at the rate of $0.03 to $0.25 per subscriber per month for most of what's on basic cable. Some channels do pay for access to cable networks, but that's for ad-heavy junk like the Jewelry Channel.
This may be an indication that search results are now too ad-heavy. That's a bad place to be. Myspace went there, and crashed from hero to zero in three years.
I think Google created Chrome to make sure that Google Apps, online versions competing directly against Microsoft, will be sure of running sufficiently well on some set of platforms. They could bid for multi-year contracts and have an answer for some prospective buyer who asks, "Yeah, your apps work in the browser now, but what if the browser changes?" Answer: "We have a good browser which we control fully, and we will guarantee support for the apps we're selling you on Chrome until YYYY-MM-DD".
IE can clearly sabotage Google Apps, and Mozilla might go in its own direction and not serve the needs of Google Apps.
Just hypothesizing, but what would happen if Google didn't renew their contract with Mozilla, allowing Microsoft to burn $300 million a year, while expecting users to change their search provider based purely on the expectation that their product was stronger than Bing search?
Additionally, Firefox would take some flames from users who would be unexpectedly switched away on their next product update. I doubt that Mozilla could change the existing search provider without people noticing or complaining that their rights were invaded, and they would be forced to do so because of the contract. Mozilla may essentially be forced to accept Google on their terms, whatever they were, and turn down a higher bid from Microsoft and Yahoo, simply based on the difficulty on making the switch alone.
Starbucks, Harbuckle of Breath.
So move along. Go play with your toys.
If Google really cared they would fix Android Chrome to reflow text, instead of discriminating
Unfortunately, it doesn't look like the EU sees things this way. One of the Microsoft subsidiaries that provides Bing with targetted shopping results integrated into the main search submitted an anti-trust complaint about Google doing the same thing with their shopping results, and the EU are taking it seriously, which means that in the name of enforcing anti-competition laws soon Microsoft may become the only company allowed to integrate this kind of context-specific search with web searching.
I take your point - they certainly convey information in a less clear fashion than simply saying X times. I would say that the 100% does represent a 'whole' here, and I believe that the over 100 statement is being used for dramatic effect. Usually a percentage is smaller than 100, so when going above it makes a big impact in the reader's mind. In this context it is because one might have expected Google's contribution to be lower this time around due to increased Chrome usage, so Mozilla might only receive 10% of previous amounts. The larger number catches your attention more if you're just skim-reading.
All that said, however, this is goddamned Slashdot, so we can handle a little math! Just give us the straight numbers (three times, or 300 million vs 100 million etc) and journalistic attention grabbers like this aren't so necessary.
People at debian, Linux Mint, etc.:
All you have to do is fork Firefox, fix the release schedule and earn many millions.
When you look at how fast Libreoffice has taken over from OpenOffice, a sane version of Firefox (like Icecat) could get 10% marketshare within a year, which translates into about 100 million per year.
If some Microsoft people thought they were clever by making sure that Google overfunds Firefox, the joke is on them. In reality, the best thing that could happen for MS is that Firefox's oxygen is cut off. I can't think of a way that Google can invest money which is more harmful to MS than by funding Firefox. With two good browsers teaming up to take on MSIE, I don't really see any possibility for MS to dominate the internet like they once hoped. If anything, this situation guarantees that they will lose more users and more control. Imagine if US special forces cleverly managed to part the Taliban with a big chunk of money. Is that a win for the US? Not if that money was actually just diverted to Al Quaeda.
Please be careful. The add-on gallery displayed in IE is seeded with 3rd party "providers" that use Google logo, yet the searches definitely do NOT go to Google. I don't know why MS/Google won't litigate those to hell (or simply kick them out), but that's a fact. Every time I upgrade IE and get presented with the add-on gallery, the first Google-branded providers have nothing to do with Google. The concept of this add-on gallery is fundamentally broken, and I wonder how many drive-by infections those "providers" are accountable for.
A successful API design takes a mixture of software design and pedagogy.
Microsoft didn't "make" Google do a damn thing. Google CHOSE to outbid Microsoft.
Morass -- that's exactly what I thought of it. Not only you have to dredge for Google, but you have to inspect the links used by those add-ons -- many show off Google logo but have nothing to do with Google, they go to some 3rd party url. It's creepy because I'm sure many people must fall for that.
A successful API design takes a mixture of software design and pedagogy.
probably includes the entire operating budget of YouTube, and Google+. And possibly the other "free" services like Google Maps, Google Earth, and Gmail.
And if their accounting is finer-grained than that, I still bet it includes the revenue-sharing on YouTube.
We are the 198 proof..
HTML5 is, obviously, not a Chrome-only technology, and the HTML5 version of Angry Birds that can be "installed" through the Chrome Web Store doesn't rely on any Chrome-specific technology, and works fine (according to all reports I've seen) in Firefox.
NaCl is an open technology that Google is pushing that is only currently implemented in Chrome, but Google is pushing it to try to get other browser vendors on board with it (with, so far, little success), not as a closed competitive advantage for Chrome.
Nah, even IE on first run asks if you really want to stick with Bing (and offers a two click way to change to something else). Read into that whatever you like.
For a site about things like basic rights, Slashdot users sure do like to censor "dissent".