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Posted on November 21st, 2013 by Barry Collins

Why is Google pumping more money into Firefox?

Google search on Firefox

Something quite extraordinary has happened to Mozilla. The Firefox maker’s revenue has almost doubled from $163 million in 2011 to $311 million in 2012, according to financial statements released last week.

What’s so strange? Well, Mozilla is almost entirely reliant on Google for its income. In fact, 90% of Mozilla’s revenue comes from the income generated by Google being the default search engine in Firefox, with Google paying Mozilla a fee for the referrals generated.

So why did Google’s payments to Mozilla increase so significantly?

That very question is addressed in the FAQ accompany Mozilla’s financial statement. The answer is as follows:

Our search partnerships are designed as multi-year contracts. Near the end of each contract, Mozilla negotiates market-value rates from multiple search providers based on the present and future value our products provide. At the end of 2011, Mozilla negotiated a new agreement with Google based on growth and impact from our Firefox desktop browser.

On the face of it, that answer makes little sense. Google and Mozilla renew their deal every three years. When Google and Mozilla last negotiated terms at the end of 2008, Firefox had a 22% share of the desktop browser market and the then recently launched Google Chrome was almost nowhere. By the end of 2011, there was next to nothing separating the two browsers, with Firefox on 21% and Chrome on 19%.

So what growth was this based on? If anything, Firefox had lost market share since it last negotiated with Google, and the company that accounts for 90% of its revenue was close to overtaking it in the browser market. Why would Google pay more to prop up a competitor?

There can, as far as I can see, be only two logical explanations. Either Firefox has massively increased the search volumes it’s sending to Google. Indeed, Firefox has over the years changed its default homepage from a splash screen showcasing Firefox features to a Google search box, which could certainly help increase search referrals.

More likely, I suspect, is that one of Google’s search rivals – and let’s not mince words, we’re talking about Microsoft – put a much better offer on the table for Mozilla to switch its default search engine and homepage to Bing, and left the open-source browser maker in a much stronger bargaining position with Google. A browser with 20% market share would still generate enormous search volumes, and Google wasn’t prepared to cede that revenue to Microsoft, so it upped its offer.

Alas, we’ll probably never know, because as Mozilla CEO Mitchell Baker told CNet: “Because of the agreement with Google, that’s not something we can say too much about.”

But if I were a betting man…

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12 Responses to “ Why is Google pumping more money into Firefox? ”

  1. G-Known Says:
    November 21st, 2013 at 8:15 pm

    How about Iceweasel? It seemed there’s some search engine integrated in that browser despite it’s not associated with Mozilla, but it’s still a possibility.

     
  2. Mark Cross Says:
    November 22nd, 2013 at 6:06 am

    Because FireFoxOS and it’s associated Mobile Phone Web Browser will have the largest market share over the next ten year. There are more poor people than wealthy ones. The West has iphone v Android, the developing nations will be quite happy FireFoxOS – Nokia/Blackberry, how could you not see this?!

     
  3. Barry Collins Says:
    November 22nd, 2013 at 9:54 am

    Mark Cross – as the quote from Mozilla above states: “Mozilla negotiated a new agreement with Google based on growth and impact from our Firefox desktop browser”. It has nothing to do with Firefox OS.

    Barry Collins

     
  4. Connie Says:
    November 22nd, 2013 at 10:17 am

    How many of the referrals from Firefox based Pale Moon and Mozilla supported SeaMonkey (both of whom have Google as the default search engine) as well as Google’s own Firefox based Chrome are included in the search volumes? How many other browsers are also based on Firefox and have Google as the default search engine and get included in the referrals revenue?

     
  5. Connie Says:
    November 22nd, 2013 at 10:24 am

    G-Known: “This project [IceWeasel for Windows] is essentially a de-branded version of Mozilla Firefox, spun off from IceWeasel for Debian Linux distros.”, according to SourceForge.

     
  6. Ambriel Says:
    November 22nd, 2013 at 10:46 am

    Oh boy, I didn’t know this. Firefox has saved my sanity from day one. I actually hoped that some day Firefox could become another video sharing forum like youtube once was. I’d even pay for a yearly subscription under two conditions: 1. NO ADS! 2. We can dress up our channels with background COLOR images!!! that youtube once allowed back in the day, and like UploadSociety does now.

     
  7. Sean O'Connor Says:
    November 26th, 2013 at 4:04 am

    It is really not good to have so much of the economy base on ‘virtual’ services. It is a source of instability because value is all based on the psychology of perception. And those perceptions can change in a blink of the eye.

     
  8. Bookmac Says:
    November 27th, 2013 at 11:02 am

    So now you know why Mozilla exists and why I don’t use it.

     
  9. DENNIS HARVEY Says:
    November 28th, 2013 at 8:57 pm

    It’s probably got something to do with Microsoft’s Windows 8 Browsers causing more Users to switch over to Firefox. Google’s own browser Chrome despite the positive performance claims, has hardly made the hoped headway.

     
  10. Samuel Albert Says:
    December 9th, 2013 at 9:05 am

    I think google has become too dominant and is using its vast resources to increase its monopolistic position. The sooner the authorities realise this the better. I thought Firefox is promoted as a non profit makin organisation.!

     
  11. Helen Neely Says:
    December 19th, 2013 at 3:35 pm

    It really makes financial sense for Google to keep renewing their contract with Firefox – as most people still use it as their default browser. Not renewing it would have meant giving the part of their market to MS.

     
  12. Brian Anthony Says:
    February 6th, 2014 at 12:10 am

    With Google putting so much money Mozilla’s way, perhaps that’s the reason Firefox gets more unreliable with each release. Frozen page loading, crashes, slow to open even on a mega fast machine with loads of ram and virtually no resource drain from elsewhere. Perhaps they are being paid to p**s us off, so we will go to chrome, I for one would prefer to stay with Safari, not that I like it, but it’s faster, does not crash or cause conflicts with web mail, and it’s more secure.

     

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