Mozilla’s ‘Failed’ Bet on Yahoo Takes Spotlight in Google Trial

Mozilla Foundation’s decision to switch the search engine built into its Firefox browser to Yahoo from Google was a “failed” bet that degraded the user experience, the company’s chief executive said.

Chief Executive Officer Mitchell Baker said Mozilla decided to switch to Yahoo’s technology in 2014 after CEO Marissa Mayer took over and promised “to make a big bet on us.” 

“That bet failed,” Baker said in a videotaped interview from 2022 played Wednesday in Google’s defense during the Justice Department’s antitrust trial. “The search experience that Yahoo was providing to Firefox users deteriorated.”

The Mozilla example — the only situation in which a browser has switched the default search engine provider — has been cited by both Google and the Justice Department to support their arguments in the case. The Justice Department argues that by paying as much as $26 billion in 2021 to be the default on mobile phones, PCs and other devices, Google has unfairly choked off potential competitors such as Microsoft Corp. and DuckDuckGo. Google says that users prefer its services and can easily switch if they want.

Yahoo agreed to pay Mozilla a minimum of $375 million — more than the $276 million a year that Google was offering, Baker said. It also agreed to reduce the number of ads and offer less user tracking than Google, but over time Yahoo reneged on that and began showing more advertising, she added. 

Back to Google

“I felt strongly that Yahoo was not delivering the search experience we needed and had contracted for,” Baker said. 

Mozilla switched back to using Google in 2017 and renewed its agreement in 2020, Baker said. 

Baker also acknowledged that her salary is partly tied to Mozilla’s yearly revenue. She said she made $2.5 million in 2020 and more than that the next year after Mozilla renewed its agreement with Google. 

Before helping create Mozilla, Baker worked for Netscape Communications Corp., which developed the browser at the center of the Justice Department’s antitrust fight against Microsoft. 

Firefox’s browser has a feature that lets users easily change between searching on Yahoo, Google, Microsoft’s Bing or DuckDuckGo. Even with that, Baker said, “the number of users who stayed with Firefox declined noticeably during the years when Yahoo was the default.”

Firefox’s user decline wasn’t necessarily because of the switch, Baker said, but it did coincide with search engine change. 

“Our users made it clear that they look for and want and expect Google,” she said. 

Firefox Market Share

At its peak, Baker said Firefox had a market share of about 32% in the US for desktop computers. The money Google paid Mozilla accounted for about 90% of the revenues the foundation brought in for 2012 and 2013, Baker said. She didn’t disclose how much Google is paying the company today, but agreed the amount is “hundreds of millions of dollars a year” — more than Google was paying when Firefox was at its peak market share.

The company has had difficulty competing for users on mobile because of the Chrome and Safari defaults on Android phones and iPhone, she said. 

“Merely having an app in the app store is a very difficult way to compete with the preloaded defaults,” Baker said. People have to “make a conscious decision and go through a lot of work to get your product.”

Mozilla is currently experimenting with how users respond when some search queries are sent to Bing instead of Google, she said.

“When our agreements come up for renewal, we historically looked at the market to see what the options are,” she said. More “competition in the search market would help us.”