Firefox dumps Google for search, signs on with Yahoo

Google's 10-year run as Firefox's default search engine in the US is over. Yahoo wants more search traffic, and a deal with Mozilla will bring it.

In a major departure for both Mozilla and Yahoo, Firefox's default search engine is switching from Google to Yahoo in the United States.

"I'm thrilled to announce that we've entered into a five-year partnership with Mozilla to make Yahoo the default search experience on Firefox across mobile and desktop," Yahoo Chief Executive Marissa Mayer said in a blog post Wednesday. "This is the most significant partnership for Yahoo in five years."

The change will come to Firefox users in the US in December, and later Yahoo will bring that new "clean, modern and immersive search experience" to all Yahoo search users. In another part of the deal, Yahoo will support the Do Not Track technology for Firefox users, meaning that it will respect users' preferences not to be tracked for advertising purposes.

With millions of users who perform about 100 billion searches a year, Firefox is a major source of the search traffic that's Google's bread and butter. Some of those searches produce search ads, and Mozilla has been funded primarily from a portion of that revenue that Google shares. In 2012, the most recent year for which figures are available, that search revenue brought in the lion's share of Mozilla's $311 million in revenue.

Google now has Chrome, though, and it doesn't have to share search-ad revenue from that browser with anybody but itself. Yahoo, meanwhile, has ambitions to reclaim its former prominence in Web search.

Yahoo showed a preview of a revamped search interface that Firefox users in the US will start seeing in December.
Yahoo showed a preview of a revamped search interface that Firefox users in the US will start seeing in December. Screenshot by Stephen Shankland/CNET

"At Yahoo, we believe deeply in search -- it's an area of investment and opportunity for us. It's also a key growth area for us," Mayer said. "This partnership helps to expand our reach in search and gives us an opportunity to work even more closely with Mozilla to find ways to innovate in search, communications and digital content."

More flexibility in Firefox innovation

Mozilla wanted to move away from a global search contract to one that offered more regional flexibility, but the Yahoo deal also was motivated by Mozilla's desire to improve the search experience for Firefox users, said Mozilla Chairwoman Mitchell Baker. "They're open to innovations," she said.

That includes work on how Firefox's "awesomebar" -- its combined address and search box -- retrieves data both from people's own content and from what's available online. "Search of external providers and search of our own stuff is closely related," Baker said. "There are lot of potential improvements there."

Negotiating with Yahoo was simpler than with Google, Baker said. Google competes directly to try to lure users to its own Chrome browser.

"When you have a partnership that has competitive aspect to it, it does require a lot of time and attention and focus," Baker said.

Mozilla was in a good bargaining position: search engines have been placing a higher value on its search traffic, Baker said.

"Both arrangements we were looking at had very good economics," Baker said. "We're utterly confident in our stability and viability going forward."

More search volume

Search volume is important to search engines. The more that people search, the more opportunities advertisers have to show ads, including ads associated with search terms that might not otherwise be common enough.

Terms of the deal weren't announced. Firefox users will continue to be able to change their default search engine.

Still, Jan Dawson, chief analyst at Jackdaw Research, thinks many Firefox users will not bother to change the default settings. "Google should be concerned," said Dawson. "This could mean a significant switch in market share away from Google toward Yahoo."

Google didn't immediately respond to a request for comment.

Firefox was an early leader in building a search box directly into the browser, but after a decade sending traffic to Google, Mozilla concluded it was time for a change.

"Google has been the Firefox global search default since 2004. Our agreement came up for renewal this year, and we took this as an opportunity to review our competitive strategy and explore our options," the organization said.

Mozilla has toyed with search-engine changes before, for example with a dalliance with Yandex in Russia, by setting Baidu as the default search engine in China and by making Bing, from erstwhile rival Microsoft, another option.

Yandex back for search in Russia

The new deal with Yahoo is only one change in which Mozilla will become more locally flexible, the nonprofit organization said. Mozilla is keeping Baidu in China and switching back to Yandex in Russia. Mozilla isn't actively looking at other search changes right now, Baker said.

The Yahoo-Mozilla deal is an alliance of underdogs. Mozilla's share of browser usage has been slipping in recent months, and Yahoo is third place with 10 percent of US searches in October, according to ComScore. For Yahoo, that was still enough for quarterly search revenue of $450 million, after payments to the affiliates that helped drive some of that search traffic. That was a 6 percent year-over-year increase, Yahoo said.

Yahoo sold off its search business to Microsoft five years ago, and Microsoft powers Yahoo search results. However, Yahoo keeps some of the revenue -- indeed, all of it for mobile searches. Yahoo declined to comment on specific revenue share terms of that deal.

"We are coming to the midpoint of the 10-year agreement" with Microsoft, Mayer said after reporting results for Yahoo's fiscal third quarter of 2014. "We may want to contemplate changes on both sides. So Microsoft has some rights at that point, so do we. We're working through this with Microsoft."

Mozilla has been working with Yahoo for months on the partnership, and relations with Yahoo's new CEO have been good, Baker said.

"Marissa has a very strong product focus, which is wonderful," Baker said. "Really having an executive who understands the product experience, who's really engaged in it, has been a real high point. We've been happy that Yahoo has gotten done the things that said they would get done with us."

CNET Staff Writer Richard Nieva contributed to this report.

Updated at 4:28 p.m. PT with comments from Mozilla's Mitchell Baker.

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