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Did Microsoft Make Google Pay Triple Rate To Mozilla? 248

Posted by samzenpus
from the jacking-up-the-price dept.
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."
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Did Microsoft Make Google Pay Triple Rate To Mozilla?

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  • To avoid antitrust (Score:3, Insightful)

    by bonch (38532) * on Wednesday December 28, 2011 @05:59PM (#38520442)

    Many took this as charity, and for the purpose of advancing the web.

    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 [twitter.com], 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 [google.com], 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 [mozillazine.org] 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.

    • by iluvcapra (782887) on Wednesday December 28, 2011 @06:16PM (#38520604)

      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.

      • by rtb61 (674572)

        That really matters, not one bit at all. Mozzila can auction off the search box in any way it chooses and good on it. What counts now is how it is going to spend the money.

        Lets see that Thunderbird open source mail and calender server. It is time to take M$ Lookout, head on, time to smash the till of exchange server.

    • It is absurd. Because nobody mistook it for charity. Before the deal was announced, there was speculation that Microsoft/Bing would try to make a deal. When the deal was announced, the price tag was kept secret and most speculation was that it was less than it was previously. A couple days later when the $300 million/year number was revealed, it was also revealed that Microsoft (and yahoo, straggly enough) had also made bids.

      Avoiding anti-trust issues make no sense at all since Microsoft and Yahoo bo

      • by asa (33102) <asa@mozilla.com> on Wednesday December 28, 2011 @07:33PM (#38521272) Homepage

        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.

    • by jd (1658)

      Don't know who marked you as overrated - your points seem entirely valid and interesting.

    • by Bucky24 (1943328) on Wednesday December 28, 2011 @06:35PM (#38520794)

      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).

      • by Daniel Phillips (238627) on Wednesday December 28, 2011 @07:29PM (#38521250)

        ...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.

        • 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.

          Since WebKit is mostly LGPL unless they plan on violating the license how exactly are they going to take it private?

          • 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.

            Since WebKit is mostly LGPL unless they plan on violating the license how exactly are they going to take it private?

            Most of Webkit is under BSD license. Mozilla foundation (or anybody else, including your or me) could easily re-license all the BSD parts of Webkit under (L)GPL. Of course, making this stick depends on having a good stream of contributions including bug fixes and new features into the (L)GPL code base. Which tends to just happen given that a significant number of developers prefer to contribute to a copyleft code base over non-copyleft, other things being equal, and given that any contribution to the BSD-li

            • According to Wikipedia, JavaScriptCore and WebCore are under LGPL. I don't know if that makes "most of WebKit" or not, but it strikes me that those (WebCore in particular) certainly are the most important part of it.

              • According to Wikipedia, JavaScriptCore and WebCore are under LGPL. I don't know if that makes "most of WebKit" or not, but it strikes me that those (WebCore in particular) certainly are the most important part of it.

                I agree, "most of" was the wrong term. More like "a significant part of". This does not change the point: Mozilla.org is perfectly free (as are you and I) to put those significant, BSD licensed parts under (L)GPL. It would be a good move. Apple and Google will naturally hate this proposal, but in the end they would probably both benefit in terms of improved code quality, while being gently dissuaded from evildoing of the sort that is all too tempting when source code may be kept secret.

      • by DragonWriter (970822) on Wednesday December 28, 2011 @08:01PM (#38521536)

        Chrome and Firefox are competitors, but Google only created Chrome for pushing ads.

        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.)

      • Actually Google created Chrome to push Google technologies.

        Pushing Google technologies make sure people keep using Google websites and thus keep getting their ads (and Google to get people's data - remember, you're the product now).

        So while the conclusion is what you said, I think it's important to decompose the steps. Specially because pushing Google technologies may go against Mozilla/Firefox sometimes, as all technologies are not made for the "open, standard, etc. web" and Mozilla would actively refuse t

        • 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 cle

    • by Chuck Chunder (21021) on Wednesday December 28, 2011 @07:02PM (#38521042) Homepage Journal

      Firefox usage is falling

      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 [opera.com] 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).

      • by asa (33102) <asa@mozilla.com> on Wednesday December 28, 2011 @10:49PM (#38522660) Homepage

        Mozilla Firefox users and usage is increasing. For the last year or so it hasn't outpaced the growth of the Web, but it is certainly increasing in absolute terms. I don't have the graphs in front of me but it's tens of millions of additional Firefox users so far this year.

      • by Kjella (173770)

        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).

        If you wanted a first-order approximation to the business value you could start with adjusting for market share per country and GDP. A user in the US is far more valuable than a user from some poor country in Africa. Global market share is more a popularity contest indicating where the market might be going.

    • by marcosdumay (620877) <marcosdumay@gm[ ].com ['ail' in gap]> on Wednesday December 28, 2011 @07:27PM (#38521230) Homepage Journal

      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.

      • by InterestingFella (2537066) on Wednesday December 28, 2011 @09:56PM (#38522398)

        Google and Firefox are not competitors. Competitors don't go buying each-other products.

        Yes they do. The most obvious example being mobile phone and tech world. There are only a few companies in the world that own fabs so all companies are buying parts from them. Even when they have competing products overally, ie. they both sell smart phones. For example Samsung owns fabs that do parts for Apple, even while they both also sell phones.

        It's business, it's not a bitter relationship with an ex-gf. Competing businesses can do business when it suits them while still competing in slightly relevant area without personal feeling getting in the way.

      • Competitors don't go buying each-other products

        Samsung, Apple?

    • by DragonWriter (970822) on Wednesday December 28, 2011 @07:48PM (#38521410)

      Which is absurd. Chrome and Firefox are competing for the same users.

      As long as Google is the primary search provider in Firefox, and as long as Mozilla is actually pursuing its statement mission of advancing the open web, Chrome and Firefox are both places where Google is spending money to an getting the same basic thing for the money:
      1) Direct promotion of google's search advertisement revenue through placement as the default search provider, and
      2) Indirect promotion of the market for a wide range of Google's for-pay services (including search and non-search advertisement, application hosting through App Engine, and others) by making open web technologies a more attractive application platform and the web a place where users spend more time.

      David Ulevitch, founder of OpenDNS, had a more likely hypothesis, which is that Google is protecting itself from increased antitrust scrutiny.

      A whole lot more plausible of a hypothesis is that Google is spending money in the search deal to advance is direct and immediate revenue stream from search advertisements, and that the indirect benefits to its strategic interests in its other revenue sources are a reason that Google is willing to spend more for that advertising revenue than other bidders, particular Microsoft, who don't share Google's other interests in Mozilla.

      Antitrust concerns are a pretty ridiculous hypothesis for Google investment in Mozilla, since Mozilla doesn't compete with Google anywhere where Google is dominant.

    • Google and Mozilla are competitors. Remember, you are the product, and advertisers are Google's customers.

      They could be competitors. Clearly they aren't when they are cooperating to deliver users to Google.

    • by ilguido (1704434) on Wednesday December 28, 2011 @07:57PM (#38521498) Homepage

      David Ulevitch, founder of OpenDNS, had a more likely hypothesis [twitter.com], 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.

      So, in your opinion, Google is paying Mozilla to strengthen its search engine market share (85%) at the expense of its web browser market share (25%) because they fear the antitrust scrutiny. Just to point out, an antitrust investigation on Chrome is just impossible: it is not by any means in the same position as IE was, the only browser bundled with a monopolistic OS.

      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. MS keeps releasing Office for Mac because: it makes money (1), it secures the Office lock-in by spreading the OOXML format (2). The second point is extremely important to MS, they want to spread their inextricable file formats everywhere so to secure their monopoly. See? All the contrary to what you said.

    • by jbeaupre (752124)

      From Mozilla's perspective, Chrome and Firefox are competitors. Mozilla's goal is to spread the Firefox browser, but Chrome hinders that.

      From Google's perspective, Chrome and Firefox are cooperative ... under the current agreement. Google's goal is to maximize traffic to Google. By having 2 significant competitors to IE, they can (assuming browser parity) capture 2/3 of traffic instead of 50% (Chrome, but Mozilla is neutral) or 1/3 (Chrome, but Mozilla goes with MS).

      Of course they could have not bothered

    • by hairyfeet (841228)

      Lets not forget the check MSFT cut to Apple. Sure it wasn't much but the main thing it did along with promising to keep writing software for Apple was it calmed spooked investors who said "Well if Microsoft thinks there is money to be made there, maybe they know something we don't?" but in the end it was as you say an excuse to keep from painting a big bullseye on its back. Just as i have no doubt if AMD wouldn't have started picking up and selling out of chips Intel would have found some way to keep them a

  • by Colin Smith (2679) on Wednesday December 28, 2011 @06:01PM (#38520468)

    No, you're the product.
     

    • by geekoid (135745)

      no SHIT! Did you think know one new that?
      Next up, ads on TV are there to sell you things! shocking!

    • by Ynot_82 (1023749) on Wednesday December 28, 2011 @06:09PM (#38520534)

      you're the product.

      Do you not see the irony in this statement, posted to this site....

    • If I'm the "product," wouldn't that mean I'm entitled to some form of compensation (preferably monetary)?
      • by trip23 (727132)
        If you are the product, you are entitled to be sold. Money goes to the producer. Or Trader. They will feed you well, if you incorporate value.
      • If I'm the "product," wouldn't that mean I'm entitled to some form of compensation (preferably monetary)?

        Sure, you're entitled to use their fairly decent browser, webmail, and search service. Their ads actually managed to point me to a decent hotel deal a couple weeks ago

      • Re:Question (Score:4, Funny)

        by 93 Escort Wagon (326346) on Wednesday December 28, 2011 @07:11PM (#38521112)

        If I'm the "product," wouldn't that mean I'm entitled to some form of compensation (preferably monetary)?

        You think they give you free access to Gmail, Chrome, etc. out of the goodness of their corporate heart?

      • You're not paying for search, but it's clearly not something that can be done for free - it takes gobs of bandwidth just to spider everything and racks upon racks of processing to digest it all into something that can fit on mere "whole data centers" worth of disks.

        Since you're not paying, someone must be. And if they're paying, what must they be buying?

    • Neither one, but both: we are all users and people that are used. Didn't you listen to pop music in the eighties? Sweet Dreams ring a bell? How about an image of Marlyon Manson riding a pig while wearing a tutu? Anything?

      The world isn't digital, its analog.

    • So move along. Go play with your toys.

  • by gman003 (1693318) on Wednesday December 28, 2011 @06:09PM (#38520538)

    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.

    • Are you sure there are no hidden clauses in the contract that prohibit Mozilla from creating an app-store? I am glad Mozilla got funding. I am glad Apache is picking up Open Office. I am very disappointed in the walled gardens in Android and iOS app-store markets. Don't even mention the fragmentation and lack of standards in the TV/Boxee/AppleTV/Roku/ segments.

      I really wish Mozilla/Firefox would create a standard open-standard API for apps and allow app developers to use a develop once and run anywhere m

      • by asa (33102) <asa@mozilla.com> on Wednesday December 28, 2011 @07:27PM (#38521228) Homepage

        Mozilla is building an open standards-based API for apps that allow app developers to develop once and run anywhere. Have a look here for a preview. We'll be investing considerably more in this project in the coming year. See more here https://apps.mozillalabs.com/ [mozillalabs.com]

        And no, Mozilla would absolutely not sacrifice something fundamental to our Mission for revenue. See more here http://www.mozilla.org/about/mission.html [mozilla.org]

        • Thanks for the info. Great to know. Wish you all the best, and hope Mozilla API becomes the defacto standard in the app store model.
      • I am very disappointed in the walled gardens in Android and iOS app-store markets.

        I don't care about Apple's walled garden, that will take care of itself, and I don't perceive the Android market as a walled garden. All the excellent free (as in freedom) applications I downloaded without providing a credit card number says the Android market is not walled. But Android development is most definitely a walled garden and that sucks because Google designers and coders are not nearly as good as they think they are, or as they would have us believe. Which translates to real life suckage that hu

      • by kesuki (321456)

        firefox was the first appstore i encountered IIRC though they call em add-ons... and they are donation supported.

    • I mostly agree what you are saying, but I want to point out 2 technical points.

      First, supply is not constant. It’s like saying the supply of Ford cars is constant because Ford is the only supplier of Ford cars – which – while technically true does not offer a lot of insight. Consumers demand a web browser. There are many suppliers of web browsers which are close substitutes. There is a reason why Google is paying Firefox 300m but not Opera.

      Second, while "Default search provider" can't rea

      • by steelfood (895457)

        You're correct about the lack of a constant "supply". In Firefox's case, supply is a function of the number of eyeballs looking at it. Being the default search provider is basically Google's marketing and advertising. Which leads me to wonder, since Mozilla is basically making money off advertising Google's product, does Mozilla consider their userbase the product too? Because it would explain a hell of a lot about Firefox's direction if it was true.

        Actually, Firefox comes with several search options beside

    • by evilviper (135110)

      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.

      It's anything-but supply and demand. You've got a monopoly dumping money into an adjacent industry, running their operations at an OBSCENE loss year after year. With the primary goal not of trying to get a foothold, but instead happily wasting money on a failed cause in hopes of wounding a major competitor on their home turf.

      • by gman003 (1693318)

        Google hardly has a monopoly. They have market dominance, but none of their products are the only major option.

        Search? They own 80%. For the rest, there's Bing, Baidu, even Ask.com. 80% is not normally a monopoly, especially when you can point to a single competitor with nearly 10% market share (if it were Google 80% and 200 other companies 0.1% each, then you could argue that it was effectively a monopoly, but that is not the case).

        Ads? There's nothing stopping you from taking bids to run your own ads on a

  • by Anonymous Coward on Wednesday December 28, 2011 @06:12PM (#38520564)

    "'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.

    • by Anonymous Coward on Wednesday December 28, 2011 @06:33PM (#38520776)

      The vast majority of TV stations get their revenue from advertising. That doesn't make NBC an advertising company.

      Wikipedia gets all of their revenue from donations. That doesn't make Wikimedia a donation company.

      You people really need to learn to separate what a company does from how it finances those operations.

      • The vast majority of TV stations get their revenue from advertising. That doesn't make NBC an advertising company.

        Are you sure about that? Anyway, Google owns Doubleclick, which is most assuredly an advertising operation.

    • "'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.

      The original poster is correct. Google's original business plan was wildly different from auctioned search terms. Believe it or not, it was... well, you can do your own research, I've done mine.

      • The original poster is correct. Google's original business plan was wildly different from auctioned search terms. Believe it or not, it was... well, you can do your own research

        From what I remember of reading "Googled" by Ken Auletta when it came out, Larry and Sergey didn't have a business plan initially, even after getting venture funding for Google. They tried to make the best search engine they could and assumed money would somehow follow if they developed a great product. After a couple years, I believe the first idea they had was farming out their search services to places like Yahoo -- which iirc was their first deal. When that didn't keep the VCs happy, they gradually beca

  • 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!
  • by landofcleve (1959610) on Wednesday December 28, 2011 @06:38PM (#38520824)
    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.
  • 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.

  • I made a comment talking about how this was likely just a few days ago [slashdot.org].

    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.

  • by drolli (522659) on Wednesday December 28, 2011 @07:16PM (#38521148) Journal

    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.

    • by gbjbaanb (229885)

      especially given what would happen if the default search engine for the majority of the web users became Bing - in IE, in FF, in anyone stupid enough to install Yahoo and it's toolbar or the "Bing Bar" crapware.

      Imagine a world where Bing was the majority search engine. (I know, it's difficult). Such a thing could happen if MS paid enough money out. Imagine saying "I'll just bing that".

      Its bad enough that the voice activation on xbox only responds to "bing x" for search.

      So - $300m for Firefox default search

    • ...paying 300Million seems a reasonable decision to me.

      Totally. But the number is so large that I worry about the money being largely pilfered by the usual sort of people who are attracted to large sums of money, instead of being mostly spent on doing good.

  • At 1 million $ per version, I expect to see atleast 300 google sponsored revisions of Firefox in 2012.

  • by DragonWriter (970822) on Wednesday December 28, 2011 @07:38PM (#38521308)

    Many took this as charity, and for the purpose of advancing the web.

    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.

  • Safari (Score:4, Insightful)

    by Johnny Mnemonic (176043) <mdinsmore@NoSpAM.gmail.com> on Wednesday December 28, 2011 @07:39PM (#38521314) Homepage Journal

    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?

  • by Locutus (9039) on Wednesday December 28, 2011 @08:13PM (#38521662)
    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
  • by Animats (122034) on Wednesday December 28, 2011 @10:44PM (#38522648) Homepage

    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 [museum.tv] 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.

  • 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 th

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