The Firefox Dilemma

The recent news about Firefox has created a buzz in the Internet market. Firefox has dropped Google as the global default search engine provider and selected Yahoo for the U.S Market. Is it a correct strategy for Firefox? How much Firefox going to earn from Yahoo in future? Will it be a sustainable partnership? Before going to answer these questions let's get into an in depth analysis of the web browsers and search engine market.

Web Browser Market:

The figure-1 depicts the October 2014 market share of the major Internet browsers. Clearly Google Chrome is the market leader with 40.8% of market share, followed by Internet Explorer (IE) and Mozilla Firefox with 17.9% and 16.0% market share respectively. There are two typical revenue models for any Internet browser:

1.      Revenue from search royalty: The browser company gets royalty from the search engine providers. When someone searches anything using the search engine and search engine generate revenue from the ads. This revenue is shared between the web or Internet browser provider. And a major chunk of revenue for web browser comes from this channel.

2.      Fix licensing fee for pre-installed browser on the mobile/handset: This a secondary way of revenue generation. Think about a scenario when you buy any mobile device there are certain pre-installed applications. The manufacturer of the mobile phone has to pay certain amount as the licensing fee to the application developer. So whenever any browser is pre-installed in any mobile device, then the manufacturer pays to the web browser company. 

Search Engine Market:

We can get insight about the Search Engine Market Share data from Figure-2(a) and Figure-2(b). Clearly Google is the market leader in case of desktop as well as mobile and tablet platform. At the same time Yahoo stands 3^rd in the desktop space behind Baidu (The Chinese Google) and 2^nd in the mobile platform.

Mozilla Firefox: 

Mozilla Firefox is an open-source web browser, available for Windows OS, Linux OS and Mac OS. It also operates in the mobile space providing web browser for Android OS. It was initially released on September 23, 2002. The current revenue of Mozilla Firefox is $314 Million and it is up by just 1% from last year revenue. A major chunk, around 90% of this revenue comes from Google. Figure-3 shows the year-on-year revenue of Mozilla Firefox and figure-4 shows the revenue from Google.                      

Partnership with Google:

As per a press release by Mozilla- “Firefox users alone search the web more than 100 billion times per year”. Google has been the global default search engine for Firefox since 2004. This 10 year-long partnership came to an end in this year (2014). Keeping the values of choice and independence in mind Firefox dropped Google as the default search engine. As per Mozilla it is a strategic decision. But I don't think so. Because it is called "RIVALRY".

Google introduced Google Chrome, a free-ware web browser in September 2, 2008. And gradually Chrome has eaten up the market share of Firefox. And on the year 2012 Chrome tapped into the 46.90% of total browser market share and became the market leader. Mozilla became the market follower. Again in 2014, IE over passed Firefox and became the challenger for Chrome. Figure-5 shows the year on year market share of Mozilla and Firefox. The growth of Google in the search engine market as well as in the web browser market has created problem for many organizations. Yahoo and Firefox are affected by it. As per the new strategic initiative a collaborative partnership between Yahoo and Firefox will strive to regain the past glory. 
  

This the new ad campaign by Firefox named as "Choose Independent".