Yahoo has been struggling for years, but it seems the final attempt has failed and the company is up for sale. As the bidders are lining up, one of the Yahoo’s deals struck in 2014 may out Mozilla as the biggest winner after the sale.
But let’s go back in 2012, when Yahoo appointed the ex-Google’s VP of Product Search Marissa Mayer for its CEO. It was a brave move and everyone hoped Mayer will rescue the sinking company from an imminent demise.
Yahoo knew its search engine was all but dead, but Mayer decided to resuscitate it and try to make it cool again. Yahoo focused on two fronts here – an unprecedented, as it turns out, deal with Mozilla, and an innovative mobile-centric search engine called Project Index.
We don’t know the amount of money that have sunk in the Index project, but we are still yet to see it in action, if ever.
But the deal with Mozilla was just revealed to be a particularly interesting one. As the latest reports revealed, Yahoo’s CEO offered an extremely lucrative deal to Mozilla back in 2014 in order to secure the default search engine position in the popular Firefox web browser for the USA. Yahoo outbid Google’s $300 million payment per year and offered an annual payment of $375 million.
The contract involves a clause that if Yahoo is to be acquired by another company and Mozilla wasn’t happy with the new owner and its commitment, then Mozilla would be free to leave the Yahoo relationship, choose another partner, and receive annual payments of $375 million until the end of 2019. That’s just over $1 billion.
It seems Marissa Mayer was very confident she’ll make Yahoo great again and promised Mozilla the big money in believing that this clause would never come to pass.
Today Yahoo is said to be valued between $3 billion and $5 billion. The final bids are placed right now and we may have a buyer in the upcoming weeks. The latest reports suggest the final round of bidding will be between Verizon, Quicken Loans, and other private equity groups.
None of the bidders seem to be interested in continuing Yahoo’s efforts to keep the search business, so Mozilla may emerge as the one to profit the most from Yahoo’s twilight. Naturally, Mozilla declined to comment as it is limited by non-disclosure agreements.