Sunday, 10 December, 2017

Mozilla, Yahoo Sue Each Other over Firefox's Default Search

Marissa Mayer Yahoo! CEO Marissa Mayer speaks at Tech Crunch Disrupt NY 2014- Day 3
Sherri Watson | 07 December, 2017, 18:29

Yahoo and Mozilla, the maker of the Firefox web browser, are embroiled in a legal fight over a 2014 deal that made Yahoo the default search engine for Firefox users in the US. Yahoo's websites were acquired by Verizon in June, which prompted Mozilla to terminate its agreement with Yahoo and make Google its default search engine instead. In a counter complaint, Mozilla says that it was not only justified in terminating the contract early, but that Yahoo Holdings and Oath still have a bill that needs to be settled. But according to a Mozilla statement on Tuesday , the company reviewed the deal following Yahoo's acquisition and chose to exercise its "contractual right" to terminate its agreement with Yahoo.

A copy of the lawsuit filed with the Superior Court of California in Santa Clara County did not include the financial details of the agreement.

Following the closing of its purchase, Verizon rebranded several Yahoo and AOL (a 2015 Verizon acquisition) businesses under the name "Oath".

In its cross-complaint [PDF], Mozilla said it is seeking payments owed to it from the 2014 agreement. Attorneys representing Mozilla also did not respond to inquiries.

Mozilla's termination of its agreement is "a breach of the plain terms of the parties' contract", Yahoo Holdings/Oath said in a heavily redacted version of its December 1 complaint. However, the kicker is that the contract also states that should Mozilla walk away due to a change in ownership on Yahoo's part, the new parent company would still have to pay Mozilla for the remainder of the contract.

Though disgraced ex-C.E.O. Marissa Mayer parted ways with Yahoo six months ago, her legacy continues to plague what's left of the tech giant. Web browsers, where most Internet users start their online visits, are a lucrative source of search traffic against which companies like Yahoo and Google sell ads. While Yahoo has a market share of 12 per cent, Google has a massive market share of 63 per cent. The foundation noted that Yahoo Search failed to meet the specification stated in the contract, and it claims that Yahoo's new owners, Oath, lacks any strategic plan in developing its search business.

Firefox's market share is about 13 percent to Chrome's almost 59 percent.

Nearly exactly three years later, when Firefox Quantum was released, on November 14 2017, Mozilla reverted to making Google the default search engine in the United States, Canada, Hong Kong and Taiwan, while retaining Yandex In Russia, Turkey, Belarus and Kazakhstan and Baidu in China. Reports of widespread security breaches at Yahoo hurt its reputation, according to Mozilla.

So it seems Mozilla can switch search partners and still expect revenue.

But in early November, Mozilla terminated that deal and signed with Google.

Yahoo Acquirer's response to Mozilla's concerns was in stark contrast to Yahoo's assurances from CEO Mayer at the time the Strategic Agreement was entered into.

One last thing: the two Yahoo! companies mentioned in both claims are registered in Ireland and Singapore, friendly jurisdictions for multinationals that like to optimise their tax affairs. This has been termed by Mozilla as a breach of contract.

The case is Yahoo Holdings Inc.et al. vs. Mozilla Corporation, No. 17CV319921.