Yahoo Really Wants That Apple Deal

Yahoo made some big waves in late 2014 when it partnered with Mozilla to replace Google as the default search experience in Firefox. Apple’s similar deal with Google is near its expiration, and Yahoo CEO Marissa Mayer seems really interested in that.

Do you think Apple should drop Google and go with a different search provider like Yahoo or Microsoft? Share your thoughts in the comments.

Yahoo reported its Q4 earnings on Tuesday. During the conference call, Mayer said this about the Mozilla partnership in her prepared remarks (via SeekingAlpha’s transcript):

External sources estimate that Mozilla has 3% to 5% of the North American search market. So this is a significant opportunity. We began serving Mozilla partly through December, so we’ve not yet had a complete calendar month of data on the deal but we are already impressed with the volume Mozilla search has brought to our marketplace and the insightfulness and agility of the Mozilla team…Our new partnership with Mozilla gives us reason to be optimistic that search will continue to be a growth story.

During the question-and-answer session, Mayer was asked about Yahoo’s ongoing search partnership with Microsoft (which she reportedly hates) as well as the company’s new deal with Mozilla to become the default search experience in the Firefox browser. She said the “search alliance” hits the halfway point later in Q1, and that the deal has provisions that allow them to consider adjustments to its relationship with Microsoft. They’re actively exploring options and different models, she said.

She said:

On Mozilla overall we haven’t disclosed the financial arrangement between the two companies…it’s about 3% to 5% of the North America search market and overall, the volume’s been fantastic and the teams are just terrific to work with. That said it’s a really significant partnership and will always take time to equilibrate and tune our performance with the Mozilla traffic. And so we are very hopeful about it but at this point really too early to tell.

There have been reports that Yahoo is also interested in taking Google’s place as the default search experience in Apple’s Safari browser, which would be huge for the company in terms of gaining more significant market share. Apple has in recent years been distancing itself more and more from Google. Mayer was asked about this during the Q&A as well. She said:

The Safari platform is basically one of the premiere search engine in the world, if not the premiere search engine in the world. We are definitely in the search distribution business. I think we stated that really clearly in the past and I think with Mozilla and also in addition we brought Amazon and eBay onboard with smaller distribution partnerships in Q4, we are in search distribution business and anyone who is in that business needs to be interested in the Safari deal.

The Safari users are among the most engaged and lucrative users in the world and it’s something that we would really like to be able to provide. We work really closely with Mozilla to ultimately bring to their users an experience that they designed and that they feel really suit those users and we welcome the opportunity with any other partner to do the same, particularly one with Apple’s volume and end user base.

In other words, yeah, she really wants that deal. Kara Swisher who has covered Yahoo for years probably better than anyone else in the industry, liveblogged the earnings call, and commented, “Mayer appeared to practically salivate at the prospect if Apple throws over Google for someone else. Issue: Microsoft. Another issue: Yahoo search technology would have to be majorly upgraded.”

In response to another question, Mayer went on to say more about Yahoo as a search partner in response to another question:

Well certainly on search and across the board we pride ourselves on being the best partner in Silicon Valley. We work across the board with Google, Microsoft, Apple, Facebook, Twitter, we have different Samsung, we have different partnerships with all of these different providers and it’s not easy, they can’t look at each other but we work well with them.

She said the reason they work so well is because of how flexible Yahoo is.

In 2014, things started to get really interesting for Yahoo’s search business for the first time in a long time. 2015 may just shape up to be a major comeback year for the company on that front.

Google is already showing concern about Yahoo’s place in Firefox. If Yahoo scores the Safari deal, it’s going to be a whole new ballgame.

Google has been trying to get people to switch back with messages like this:

And one on the Google homepage in the Firefox browser, which says, “Get to Google faster. Make Google your default engine.”

Google also reported its earnings this week, and also discussed Yahoo’s deal with Mozilla a little. CFO Patrick Pichette said (via Seeking Alpha’s transcript):

You’ve all heard the announcements about Mozilla. And so when we don’t comment on the details of any of our partnerships that we have, having said that, we continue to do two things that really matter. One is our users continue to actually go in, if they love Google, they will continue to find Google, whichever platform, whichever browser, and that’s really what we’ve focused on doing.

And then the second piece is the way to win this in the long-term, right? It’s very simple. You just make wonderful products. And when you make wonderful products that are magical people will find them….partnerships matter. But at the core of it, you need partnership, because you have a phenomenal product. And that’s what we’re going to continue to build this amazing company.

Last week, Merkle | RKG released its Digital Marketing Report for Q4 2014, which looked at the impact of the Yahoo/Mozilla deal on paid search.

“We’re now able to assess the impact of the deal on Yahoo’s share of Firefox paid search traffic, which grew from 12% at the beginning of December to 30% by the end of the year,” the report said. “However, digging deeper reveals that Yahoo’s share of Firefox 34 paid clicks has been in decline ever since the first big wave of updates in the second week of December. While the initial rollout saw Yahoo’s share rise to a peak of 43% on December 10th, that figure was just 36% by December’s end.”

“This is primarily the result of users switching the default search engine of their browsers back to Google, as shown by the corresponding increase in Google’s share of Firefox 34 paid clicks throughout the month of December,” it added. “All in all, it appears the deal will move about 2% or less of total paid search traffic from Google to Yahoo. This is far less than the 10%+ of paid traffic that stands to be on the table if Safari default search were to change hands, which news outlets have reported is a possibility in 2015.”

According to that report, Bing and Yahoo outpaced Google in paid search growth, not only because of the Yahoo Firefox deal, but also rapid growth from Bing Product Ads.

Do you think Google is in danger of losing any significant amount of market share? Do you think Apple will drop Google? Would it go with Yahoo? Tell us what you think.

Note: This article has been updated from a previous version to include additional information.

Image via Wikimedia Commons