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Verizon must pay even if Mozilla walks from Yahoo search deal

Gregg Keizer | July 26, 2016
Firefox's maker can opt out, Yahoo CEO Marissa Mayer confirmed last week; but if Mozilla does, Verizon's payments may be much smaller

When a Wall Street analyst later asked for more information about the Mozilla deal, Mayer repeated her assertions that the media got it wrong.

"On Mozilla there's not a lot more that I can say because it is a confidential relationship," Mayer said. "But we did want to point out, because I think it has been misunderstood, at least with some of the analyses I've seen, it has been misunderstood that there is a mitigation in the contract that ultimately would reduce some of our exposure and liabilities."

Mayer's comments did not explicitly confirm the New York Times narrative -- that Verizon would have to pay the difference between $375 million and whatever Mozilla received from a new provider -- but her use of "mitigations" when talking about the contract implied as much.

Neither Mozilla or Yahoo immediately replied to questions today about the impact of the Verizon purchase on Yahoo's search sources.

But one analyst believes the Verizon-Yahoo deal would not move Mozilla to strike out for another partner. "I don't see why the Verizon acquisition changes either the search or the browser dynamic in the market," said Al Hilwa of IDC. "I think it is mostly an issue of [Verizon having assessed] the risk and factoring that into the valuation of Yahoo."

Mozilla might not have options if it did want to abandon Yahoo, a decision that in any case seems improbable, what with the premium it's being paid by Mayer's firm.

The other two big players in search -- Google and Microsoft -- have browsers of their own to feed users into their engines. Of the two, Microsoft would appear to be the most likely to add Firefox: Bing badly trails Google in search share, and Microsoft's browser share has sharply slumped this year.

 

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