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."

Re:To avoid antitrust

[iluvcapra]

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.

Re:To avoid antitrust

[Overly Critical Guy]

Wow, Galestar [slashdot.org], not only do you anonymously troll every post even remotely critical of Google, but then you use your main account to mod yourself Underrated. Speaking of shills.

So the better question IMHO

[__aasehi2499]

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.

Re:To avoid antitrust

[marcosdumay]

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.

Re:To avoid antitrust

[ilguido]

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.