From the ‘How Much is an Open Source Browser Worth?’ files:
There is a report out that claims that the renewed Google Mozilla deal is worth $300 Million per year.
WHAT? Yup I did a double take when I saw that figure too. Sure I’m a believer in Mozilla, but $300 million sure does seem like an obscene amount amount…or does it?
The Google search deal – as I understood it in the past – paid Mozilla certain amount of money on a per search query basis. In 2010, Google paid Mozilla $123 Million so the new deal could be a 3-fold increase.
Neither Google Nor Mozilla have ever really made public exactly how the previous deal works, but back in 2007 I speculated on a formula that neither Google nor Mozilla have ever challenged me on. The way I see it, Google is paying Mozilla as much as 5 cents per query and as little as a penny. With this new deal, I suspect that there is not also a ‘lump sum’ payment as well that keeps Google as the default search and on the default Firefox start page as well.
It’s likely that ‘lump sum’ piece where the big jump has come in for the revenue forecast – if the original report is accurate.
The only other justification for the higher value deal in pure math terms would be that either Mozilla’s users have grown by 3x (they haven’t) or they’re doing more searches (they’re likely not) or the value per query is higher (also not likely).
There is speculation that Microsoft and Yahoo bid for the space too. But hey, we all know that it’s simple operation in Firefox to change the default search provider or home page.
For Google, there is no question in my mind that they aren’t just paying for queries anymore. They’re paying a premium to help protect their own interests and they’re paying a premium as a way to help fund Mozilla innovation.
Mozilla’s Innovation ultimately makes the web a better place for us all, which is a good thing for Google too.