Category Archives: Search Engine Hub

The Possible Cost of Buying Yahoo

Buying Yahoo and Paying Mozilla Billions for Nothing A Possibility

In 2014, Yahoo and Mozilla made a deal that allowed Mozilla to become the default search engine for Firefox browsers in the United States.

The deal cost Yahoo a grand total of $375 million when it went through in 2015 and was meant to help Yahoo compete with Google as a way to expand its market and act as a search engine hub. On paper this sounds like a very beneficial deal but now that Yahoo is up for sale, anyone who may want to buy the company may want to have second thoughts because this deal could backfire in a fascinating way.

The Yahoo-Mozilla agree has a hidden clause that allows Mozilla to back out of the deal while still getting paid their $375 million every year up until 2019, provided the company is bought out. The clause states that Mozilla has the right to distance itself from the partnership if they feel their new partner is unacceptable for the company to do business with. This basically means that Mozilla can find a new partner to strike a deal with if they don’t like the current one and Yahoo would still be stuck paying them over one billion for the next few years.

This clause would be something a potential buyer for Yahoo would have to seriously take into account since it would prove to be incredibly costly for a buyer if Mozilla has a sudden change of heart.