Firefox with Bing: Should Google Worry?

ANALYSIS

on October 27 2011 11:08 AM

Mozilla and Microsoft make strange bedfellows. The two have joined up to release a modified version of Firefox 7 with Microsoft's search engine Bing integrated directly into the interface, called Firefox with Bing. Users who already own Firefox can opt to upgrade their browser with a Bing add-on, which essentially does the same thing.

We are excited to make it even easier for members of the Mozilla Firefox community to use Bing, said Tor Steiner, a Microsoft spokesperson.

The new partnership with Microsoft, based in Redmond, Wash., doesn't mean that the Mozilla has given up on Google;  Mozilla's contract with Google is up for renewal in November, so the company was likely seeking extra leverage in case Google backs out. Both partners are based in Mountain View, Calif.

The new deal with Microsoft is a security blanket for Mozilla. Mozilla relies heavily on royalties from search, which actually accounts for roughly 97 percent of the company's income. Google, Firefox's default search engine for many years, pays for about 86 percent of those royalties.

Royalties are a two-way street. Google's reported advertising made up 96 percent of third-quarter revenue of $9.7 billion. As the world's second most popular Web browser, Firefox's 450 million users create millions of revenue dollars for Google, but Mozilla may fear that millions aren't enough for a multi-billion dollar company like Google.

Mozilla also likely feels threatened by the popularity of Google Chrome, currently the third most popular Web browser, which has been gaining momentum and quickly catching up to Firefox. But now that Mozilla has drawn a line in the sand by agreeing with Microsoft and Bing, Google has a big decision to make.

Microsoft Internet Explorer, with 28 percent of share, is way down from the days when it owned 95 percent of the browser market. Part of its lost share is attributable to the consent decree it signed in 2000 with the U.S. Justice Department.

If Google doesn't resign Firefox, the Internet could be drastically altered. Firefox with Bing may soon be the only option for users who still prefer Mozilla's Web browser, which could put a huge dent in Google's search dominance. Google could lose millions in advertising revenue, while Microsoft would be sitting pretty, reaping search revenue from both Internet Explorer and Firefox, the No. 1 and No. 2 Web browsers. 

Google has need to worry yet; the company currently owns roughly 91 percent of the global search engine market, while Bing only accounts for less than four percent. Google is also now under investigation by the Justice Department and the U.S. Federal Trade Commission because of its scope. With Microsoft in search bars instead of Google, Firefox with Bing could be a drastic game changer if more users start to accept Bing into their browsing routines. Better yet, it would be fitting if Microsoft were the company to help break Google's monopoly in search, nearly 10 years after Mozilla debuted and dismantled Microsoft's Internet Explorer.

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