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Google Will Pay Mozilla Almost $300M Per Year in Search Deal

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Re: Google Will Pay Mozilla Almost $300M Per Year in Search Deal

#41

Post by johno215 »

nl wrote: post #35
jackowayed wrote: post #23

Earlier quoted context omitted.

That estimate seems pretty far off. First, I think it's only fair to attribute ~1/2 of their revenue to search. You've got to give a lot to web ads, gmail ads, etc. Second, I'm not sure it's quite fair to give FF 25% of their total search. It may be 25% of their desktop search, but mobile search is getting bigger and bigger. I'd say 25% is at best an upper bound. Third, I think a large number of FF users would use Go…

That estimate seems pretty far off. Well, it may well be 50% off, or even 80% off, but it does give you an order of magnitude. 100% correct numbers aren't really material: this is a really good deal for Google. You are right that not all their revenue comes from search, and I should have thought of that. 66% of their revenue is from Google websites[1]. They don't break that down, but I'd suspect 90% is search (Youtub…

If this was such a great money making deal for Google why did Microsoft not bid higher? They have similar monetization strategy for Bing and would have similar ROI for gaining searches. Plus, MS is flush with cash and have a great desire to compete with Google.

[edit grammar]

Re: Google Will Pay Mozilla Almost $300M Per Year in Search Deal

#42

Post by nl »

johno215 wrote: post #38
jackowayed wrote: post #23

Earlier quoted context omitted.

That estimate seems pretty far off. First, I think it's only fair to attribute ~1/2 of their revenue to search. You've got to give a lot to web ads, gmail ads, etc. Second, I'm not sure it's quite fair to give FF 25% of their total search. It may be 25% of their desktop search, but mobile search is getting bigger and bigger. I'd say 25% is at best an upper bound. Third, I think a large number of FF users would use Go…

The trick is figuring out how many users would use the Firefox search box vs would just enter google.com into the URL the old fashioned way (or would change the search box back to Google). I have no doubt Google is measuring that number and used it to guide their bidding. My hunch is that Google is only breaking close to even with this deal (i.e. making $300M for paying $300M) and bid high just to keep too many peopl…

Hunches aren't very useful without hard data. More practically, defensible logic is good practice on HN, because people try and build real businesses based on what they read here.

A month ago many people thought that Mozilla was going to be in financial trouble because "they couldn't re-sign the Google deal". That seemed to be based on little more than a hunch, which data showed that was clearly wrong (which I pointed out at the time).

Note that a donation to Wikipedia is very different (for tax purposes) to a business arrangement with Mozilla.

(I do agree that Google is good to the web though)

Re: Google Will Pay Mozilla Almost $300M Per Year in Search Deal

#43

Post by dextorious »

nl wrote: post #37
zobzu wrote: post #25

Earlier quoted context omitted.

Investors don't invest if there are no shares to get. And, there are no shares to get. And that's the whole point of Mozilla's existence. Thus, there's only such deals and donations. An investor would therefore need to donate, to support Mozilla.

1) Create a company 2) Bid $300 million for Mozilla's search spot. 3) Raise $600 million, build search engine 4) Profit (Yeah, in practice steps 2 and 3 would need to happen simultaneously)

Profit how? From your search engine?

99% of FF users would just switch to Google as soon as they install it. It's not like anybody has made a competent enough search engine yet...

Re: Google Will Pay Mozilla Almost $300M Per Year in Search Deal

#44

Post by nl »

johno215 wrote: post #41
nl wrote: post #35

Earlier quoted context omitted.

That estimate seems pretty far off. Well, it may well be 50% off, or even 80% off, but it does give you an order of magnitude. 100% correct numbers aren't really material: this is a really good deal for Google. You are right that not all their revenue comes from search, and I should have thought of that. 66% of their revenue is from Google websites[1]. They don't break that down, but I'd suspect 90% is search (Youtub…

If this was such a great money making deal for Google why did Microsoft not bid higher? They have similar monetization strategy for Bing and would have similar ROI for gaining searches. Plus, MS is flush with cash and have a great desire to compete with Google. [edit grammar]

Microsoft would love to, but they can't afford it. Bing is already losing huge amounts of money, and doing yet another deal for market share isn't going to be popular within MS unless it is profitable.

While MS could make money on a Firefox deal, they can't nearly make as much as Google can simply because Microsoft can't monetize the users as well as Google can.

You can see this on the demand side - many people try out new keyword advertising campaigns on Bing because they are so much cheaper than on Google.

Once they are confident they have a good set of keywords, they switch straight to Google (and at best keep the Bing campaign going). They'll pay more at Google, but get so much more traffic it is worth it.

Re: Google Will Pay Mozilla Almost $300M Per Year in Search Deal

#45

Post by davidu »

shoota wrote: post #31
zobzu wrote: post #22

Earlier quoted context omitted.

True, but also, if Chrome wins, it means they don't have to care about these deals too much anymore. Because right now is Firefox switches search engine, it's very bad for Google. Chrome will never switch. So, yeah. That and that they can use Chrome to lock people into Google services in the future.

Actually, Chrome gives the user a choice of search engine on first startup and does not have a default browser ( at least in the United States)

This is true, but it's also theatre.

Re: Google Will Pay Mozilla Almost $300M Per Year in Search Deal

#46

Post by bobthebee »

cpeterso wrote: post #28
zobzu wrote: post #25

Earlier quoted context omitted.

Investors don't invest if there are no shares to get. And, there are no shares to get. And that's the whole point of Mozilla's existence. Thus, there's only such deals and donations. An investor would therefore need to donate, to support Mozilla.

I think nl was suggesting that investors could raise money to buy Firefox's search spot and then create a search engine. Imagine if some VC firm raised $301M to outbid Google and then signed a deal with DuckDuckGo.

If DuckDuckGo could really make $301+ M on search in Firefox, they would bid that. Reality, they can't. There is no value created in the imagined middle man investor.

Re: Google Will Pay Mozilla Almost $300M Per Year in Search Deal

#47

Post by nl »

dextorious wrote: post #43
nl wrote: post #37

Earlier quoted context omitted.

1) Create a company 2) Bid $300 million for Mozilla's search spot. 3) Raise $600 million, build search engine 4) Profit (Yeah, in practice steps 2 and 3 would need to happen simultaneously)

Profit how? From your search engine? 99% of FF users would just switch to Google as soon as they install it. It's not like anybody has made a competent enough search engine yet...

99% of FF users would just switch to Google as soon as they install it.

I assume you can back that up somehow? Most evidence I've seen indicates that the majority of people don't change defaults.

It's not like anybody has made a competent enough search engine yet

http://blekko.com/

http://duckduckgo.com/

http://www.gigablast.com/

http://www.yandex.com/

http://www.baidu.com/

There would be more if there was an easy way around the distribution problem. Becoming the default search engine in Firefox would sure help with that problem.

Re: Google Will Pay Mozilla Almost $300M Per Year in Search Deal

#48

Post by johno215 »

nl wrote: post #44
johno215 wrote: post #41

Earlier quoted context omitted.

If this was such a great money making deal for Google why did Microsoft not bid higher? They have similar monetization strategy for Bing and would have similar ROI for gaining searches. Plus, MS is flush with cash and have a great desire to compete with Google. [edit grammar]

Microsoft would love to, but they can't afford it. Bing is already losing huge amounts of money, and doing yet another deal for market share isn't going to be popular within MS unless it is profitable. While MS could make money on a Firefox deal, they can't nearly make as much as Google can simply because Microsoft can't monetize the users as well as Google can. You can see this on the demand side - many people try o…

Good point.

Do you think Bing could be monetized at a similar rate to Google if their market shares were similar? Or are there other things Google are doing (e.g. better add targeting) that is making them more money per search?

Re: Google Will Pay Mozilla Almost $300M Per Year in Search Deal

#49

Post by mehwoot »

nl wrote: post #36
mehwoot wrote: post #32

Earlier quoted context omitted.

Woah, big leaps here. First, just because firefox has 25% of the browser market share most certainly does not mean that they provide 25% of google searches! What about all the searches through google's homepage, mobile, custom site search, etc, etc. A lot of people still use the homepage (I know, not very many amongst the tech savvy). Secondly, whilst most of google's income is advertising, not all of it is income fr…

A lot of people still use the homepage The default Firefox home page (about:home) is a branded Google search. Combine that and the Firefox search box and I would bet you cover 90% of the searches Firefox users do. Anyway, even if it is 10% it doesn't change the outcome substantially - it drops the revenue to $3-4 billion instead of over $7 billion. Either way it is worth paying $300 million for.

Sorry, by homepage I meant typing in "www.google.com" and searching from there. Or typing google into the search bar and then getting to google, and typing the query there. Believe it or not, a lot of people still search these ways.

But yeah, def still worth it, I was just questioning the "25% of google's income" claim.

Edit: In fact, I found a source for these numbers: http://news.softpedia.com/news/Firefox-Google-Search-Box-Tra...

According to this [April 2010 - but I don't think firefox's market share has actually changed a lot since then], 82% of the search market is google, and 9.18% of the search market is searches from firefox via google. That puts firefox at 11% of google's searches. I think then about 8-9% of google income would be a good estimate- couldn't quickly find any data on what % of their income comes from search, but http://www.coastdigital.co.uk/news/google-gives-breakdown-of... shows that it def isn't 100%.

Re: Google Will Pay Mozilla Almost $300M Per Year in Search Deal

#50

Post by nl »

johno215 wrote: post #48
nl wrote: post #44

Earlier quoted context omitted.

Microsoft would love to, but they can't afford it. Bing is already losing huge amounts of money, and doing yet another deal for market share isn't going to be popular within MS unless it is profitable. While MS could make money on a Firefox deal, they can't nearly make as much as Google can simply because Microsoft can't monetize the users as well as Google can. You can see this on the demand side - many people try o…

Good point. Do you think Bing could be monetized at a similar rate to Google if their market shares were similar? Or are there other things Google are doing (e.g. better add targeting) that is making them more money per search?

Hard to know. Google does have better targeting at the moment.

Back when Yahoo was a player they built a platform that was supposed to match Google (Yahoo Panama[1]) that was their big hope of matching Google. It didn't succeed.

[1] http://en.wikipedia.org/wiki/Yahoo!_Search_Marketing#Details...

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