Mozilla Could Walk Away and Still Get More Than $1 Billion If It Doesn't Like Yahoo's Buyer (recode.net)

Kara Swisher, reporting for Recode: Under terms of a contract that has been seen by Recode, whoever acquires Yahoo might have to pay Mozilla annual payments of $375 million through 2019 if it does not think the buyer is one it wants to work with and walks away. That's according to a clause in the Silicon Valley giant's official agreement with the browser maker that CEO Marissa Mayer struck in late 2014 to become the default search engine on the well-known Firefox browser in the U.S. Mozilla switched to Yahoo from Google after Mayer offered a much more lucrative deal that included what potential buyers of Yahoo say is an unprecedented term to protect Mozilla in a change-of-control scenario. It was a scenario that Mayer never thought would happen, which is why she apparently pushed through the possibly problematic deal point. According to the change-of-control term, 9.1 in the agreement, Mozilla has the right to leave the partnership if -- under its sole discretion and in a certain time period -- it did not deem the new partner acceptable. And if it did that, even if it struck another search deal, Yahoo is still obligated to pay out annual revenue guarantees of $375 million.

Comments

They should just pull the trigger

[DarkOx]

They really ought to just exercise the option unless the buyer is someone they really really want to work with. Its a lot of money and it would be very good for the foundation to get that money.

Yahoo investors were fools.

Re:Where does all the money go?

[Yvan256]

You think ignoring what your users want is cheap?

Poison Pill embedded intentionally

[SethJohnson]

Marrissa Mayer knew what she was doing. If this agreement actually exists, it was intentionally engineered to help resist a hostile takeover or shareholders forcing a liquidation of assets. Mayer took this job knowing that if either of those scenarios played out, she would be dumped without the track record to get another job of similar scale. Setting up this contract with Mozilla is one way she has been able to retain her control thus far.

Poison Pill

Re:Unreal

[PCM2]

Maybe that was actually the point. It's a "poison pill" clause. It's well known that Mayer has been against selling off the company all along but her hand is being forced by the board.