Google Ignores a Fool's Advice
Mozilla's biggest source of revenue, its lucrative default search deal with Big G, had been up in the air since its expiration in November. The foundation's predicament had been spurring speculation over the fate of Firefox, since Mozilla continued to spout vague PR niceties while declining to confirm or deny specifics on the status of its relationship with Google.
I had argued that it was strategically in Google's best interest to pull the plug on Firefox, allowing it to slowly bleed to death, while it set its multicolored sights squarely on Microsoft (NAS: MSFT) Internet Explorer. It would have been a bold move, complete with some very major risks. The most prominent of which was the distinct possibility that one of Mozilla's other search partners, like Microsoft or Yahoo! (NAS: YHOO) , would chivalrously swoop in and save the day.
Ultimately, I still think the move would have worked out for Google in the long run, but the journey to the end destination would have been much more turbulent. It seems that Google understandably wasn't comfortable with the very real risk of Bing and Firefox riding off together hand in hand into the sunset.
Mozilla has now announced that it has signed "a significant and mutually beneficial revenue agreement with Google." The agreement extends the pair's existing default search arrangement for at least three more years. No specific terms of the deal were disclosed, but chances are it looks a lot like the old deal.
I don't blame Google for sticking with the status quo. I believe Google's Chrome browser will inevitably become the No. 1 browser in the world in the foreseeable future, and its whole motivation to win the browser war is to win the search war as well. This mentality might also explain why Apple (NAS: AAPL) seemingly cares so little about its own Safari browser: It has no search business. Safari's market share has always hovered in the single digits and Apple cares far more about selling iPhones and iPads.
Since Big G already thanks Firefox for a chunk of its search market share, it probably sees no reason to disrupt the delicate balance of power, even if that means forking over another few hundred million to Mozilla over the coming years.
After all, slow and steady wins the race, right?
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At the time this article was published Fool contributorEvan Niuowns shares of Apple, but he holds no other position in any company mentioned.Click hereto see his holdings and a short bio. The Motley Fool owns shares of Yahoo!, Apple, Google, and Microsoft.Motley Fool newsletter serviceshave recommended buying shares of Microsoft, Yahoo!, Apple, and Google.Motley Fool newsletter serviceshave recommended creating a bull call spread position in Microsoft and creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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