Yahoo! and Mozilla announced late Wednesday that they were entering a partnership that would make Yahoo! the default search engine for Mozilla’s Firefox web browser. This represents a major change for Firefox, as Google has been their default search engine since 2004, and could increase Yahoo!’s search volume significantly at the expense of Google How big this increase will be will depend on how many Firefox users will use the default search engine after seeing Yahoo! results instead of Google. According to 360i data, clients with tech-savvy customers see a sizable portion of their traffic coming from Firefox (up to 12%), so industries like electronics may be affected more than clothing retailers who see about 7% of their traffic coming from Firefox. Of course, these are precisely the searchers who are likely to know how to change the default search engine, so Yahoo! is taking steps to improve the user experience in Firefox in the hopes of persuading new users to stay.
The Old Partnership Between Google and Mozilla
Google and Mozilla had a partnership that lasted ten years and was beneficial to both parties. According to a Mozilla blog post, Firefox users generated 100 billion queries per year. While Mozilla has had pre-installed engines available to use within their search tools, most queries likely went to the browser’s default engine, Google. For this privilege, Google gave Mozilla a portion of the ad revenue generated from Firefox’s queries. According to Mozilla’s 2012 annual report, the Google deal generated $311m for Mozilla, 90% of the non-profit’s total revenue.
When Mozilla and Google last re-negotiated their partnership in 2011, the deal was a three-year extension that expired this month. While negotiations were kept confidential, members of the press expected the deal to continue. Gavin Clarke from The Register described the likely outcome as “Business as usual, honest.”
The New Partnership Between Yahoo! and Mozilla
However, to the surprise of many following the negotiations, Mozilla replaced Google with Yahoo!. Terms of the deal have not been disclosed, but the partnership will last for at least five years.
Mozilla’s CEO Chris Beard said in a blog post on Wednesday that the change in search engines is to promote “choice and innovation.” However, it has been speculated that privacy settings were one of the points that broke down the agreement. Firefox supports Do Not Track browser privacy standards that Google may not have supported. Yahoo! has ignored Do Not Track requests since last May, but it will recognize Do Not Track for Firefox users.
Yahoo! CEO, Marissa Mayer, wrote in her blog post that this is “the most significant partnership for Yahoo! in five years” and that she believes that search is “a key growth area.” In her post she also shared images from a new “clean, modern, and immersive search experience” that Firefox users would see when searching Yahoo!.
How Does This Changing Partnership Impact Marketers?
There are several factors that may impact online marketers:
- The deal may improve Yahoo!’s market share – According to the latest figures from comScore, Yahoo!’s site currently have about a 10.3% market share from October’s 18.8 billion searches. This percentage is similar to previous months and still lags behind the 11.3% Yahoo! had a year ago. Mozilla’s diverted traffic from Google to Yahoo! may help improve those figures, which may in turn drive more traffic to ads served on the Yahoo!Bing network.
- The deal could create more advertising opportunities – According to a Mozilla blog post, the agreement establishes a framework for future product integrations. As both companies continue to work together and develop services, new ad placements could be created to drive more revenue for both companies.
- If the partnership fails to meet Mozilla’s expectations, it could put Firefox’s future in doubt – In 2008 Google released their own browser, Chrome. When Mozilla and Google re-negotiated their partnership in 2011, Chrome had just passed Firefox in market share. Today, Chrome dominates desktop, tablet & mobile devices and sees more usage than the top three competitors combined. Meanwhile, Firefox’s market share has decreased from 25% in December 2008 to 12% in October 2014. With a shrinking market share, separating from their partner responsible for generating most of their revenue is a huge risk. If Firefox users switch their default engine from Yahoo! to another engine or back to Google, Mozilla will not see that revenue if their Yahoo! deal shares ad revenue like their Google deal did.
What You Should Do Next
As stated above, the impact of this switch will depend on who your customers are and whether Firefox users will stick with the default option. We expect to see some shift in the budget mix in favor of Yahoo! when the changeover happens, but there will likely be a swift correction if people change their default settings. It will be important to understand beforehand how much of your budget is going to Firefox to get an idea of how much impact this might have, and then bake some flexibility into your spend for at least the first two months after the changes are in effect. And as you do your daily budget tracking, be aware that the first few days will likely be skewed, so you should avoid moving budgets around at first and allow sufficient time to observe if there is a lasting trend.
By Kenneth Hamner & Jason Hartley
Cover Photo Via Searchengineland