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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."
No, you're the product.
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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.
David Ulevitch, founder of OpenDNS, had a more likely hypothesis, which is that Google is protecting itself from increased antitrust scrutiny.
Are you sure that gets them off the hook? It keeps their market share of the web browser segment under control, but if there was ever any evidence that Firefox coordinated its revenue deal with Google, or that Firefox offered its search box as a private-label product to Google, that would be sufficiently illegal at this point, given Google's utter command of the search referral market segment.
The problem with the current arrangement is that Firefox is really only an independent organization in name only; while Google may not own it, it decides its bottom line. This goes quite a bit beyond MS propping up Apple in the good old days: at least back then Apple actually made money from physical products it actually sold. Apple wasn't a pass-thru affiliate for Windows, deriving it's total operating income from them, year over year.
I don't think antitrust regulators are doing much with anybody right now. Google just didn't want to lose eyeballs to Bing.
Don't blame me, I voted for Baltar.
Chrome helps Google display ads by directing users to Google services, such as with searches in the address bar.
And thanks to this deal, Firefox does as well. Chrome and Firefox are competitors, but Google only created Chrome for pushing ads. They don't care if the user seeing the ad is using Chrome, Firefox, IE, or Safari. The user seeing the ad and clicking the ad is all that matters to them. So really they aren't very serious competitors of Mozilla (not saying the competition isn't a serious deal, but that Google doesn't want to seriously compete against them).
All the world's a CPU, and all the men and women merely AI agents
Who is the post supposed to be a shill for? How is pointing out that Microsoft's support for rival OS' is more likely to be for regulatory purposes than interest in users in any way dubious? Most here know the history of MS Office on the Mac, of MS support within OS/2 being deliberately broken by changes in Windows 3.11? Of sabotage against DR-DOS and other rival systems? Why should we believe Microsoft supports Mac OS/X for anything but blatantly self-serving reasons, when the customers have been trodden on time and again?
Google's policy of "Do No Evil" is, at best, dubious. I like Google a lot but I would never claim that they are above reproach. Nor should anyone. They have grown at a fantastic rate, to the point where their share price has been known to dip whenever they exceed official revenue expectations by a smaller factor than usual. I'm willing to accept that their initial growth was merely through cost-effective engineering, but their applications have a high degree of tie-in and Google certainly leverages one to get traction with another. The chances of there being anti-trust potential should not be ignored and the chances that they're covering themselves (rather than their users) are not insignificant. We should take the possibility seriously.
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
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.
Why should we believe Microsoft supports Mac OS/X for anything but blatantly self-serving reasons, when the customers have been trodden on time and again?
Oh come on. Even Apple only supports OS/X for blatantly self serving purposes.
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
Chrome has been gaining share at Firefox's expense,
Really?
Google and Firefox are not competitors. Competitors don't go buying each-other products. They are partners, recently Firefox tought they weren't getting enough from the partneship, so they used some negotiation skills, and got more. Google was happy to pay more (but they were even happier to pay less), so they agreed on some terms.
But yeah, calling it charity is ridiculous.
Rethinking email
...Google only created Chrome for pushing ads.
Absolutely true, and with a secondary goal of breaking the power of a GPL code base over which they do not have complete control. Now, Google finds itself in a position of paying $300/million to support a GPL code base, over which they do not have complete control (restated for emphasis). What an excellent situation: mandatory doing of non-evil. It's actually better for Google, and better for us, when Google does non-evil like this. I fear greatly a scenario where Google has complete control of the non-copyleft code base of the dominant web browser. In that situation, I do not believe that Google would be able to resist the temptation to do evil, perhaps just minor evil at first, and later, not minor at all.
That said, I wish that Mozilla foundation would take, say, one of those $300 millions and spend it on replacing Gecko by webkit, putting its own fork of webkit under GPL. As far as I can see, that simple strategy alone would ensure Mozilla never becomes irrelevant, and that neither Apple nor Google can effectively take webkit private, which is a clear and present danger at the moment.
Have you got your LWN subscription yet?
No "number was revealed. "What you're referring to is speculation from a well respected reporter based on what she heard from her sources. Neither Google nor Mozilla have confirmed it.
Mozilla is open about pretty much everything you can imagine. The only two areas where we are not totally transparent are some employment issues and business dealings where our partners would not partner with us if we tried to force transparency on them.
Mozilla does release financials every year so you can see what revenue we generated and where we spent it. That makes it sort of possible to see what specific deals look like in broad terms but no matter how much we'd like to, we simply can't force transparency on other companies.
I doubt that. Most likely, Google created Chrome and its specific features to push the browser market in a direction that favored web-based replacements for desktop application -- you'll note that, in addition to advertisements, Google sells both its own web-based services and a hosting platform for third-party web-based services, and has consistently used Chrome to push technologies designed to address barriers to web services displacing traditional desktop apps (and also on enabling new kinds of web apps besides areas where desktop apps are popular.) JavaScript performance was the big area that was a focus when Chrome was launched, though the focus has moved somewhat from JavaScript performance as such to support for a broader range of APIs that push into non-traditional web roles (e.g., WebGL) and non-JavaScript application options (particularly Native Client), but still largely focus on browser-as-app platform.
Google created Chrome to push Google's (current and planned) revenue-generating services, but that's more than just advertising, and I would say that Chrome exists disproportionately to push Google's non-advertising services (though, of course, it doesn't miss the easy opportunity to directly push Google advertising, either.)
At the prior funding level, (100 million per year) Google accounted for nearly 100% or Mozilla.org's budget.
This story is about Google getting suckered in a bidding war to the the default (but NOT the only) search engine in the top-bar. Anyone can change the default at any time. The agreement is performance based, capped at 300 mil. If Firefox search hits falls they won't make the full 300 mil.
So if prior agreement paid 100% of development costs, and if Firefox can keep its market share up, they should have three times their development budget to add astounding new features, fix up their physical infrastructure and harden their browser and plugins. They now can afford the manpower. The ball is in their court.
I'm pretty sure Google isn't worried about Chrome market share here. They get the advertising dollars either way.
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