Mozilla and Yahoo! launch high-cost lawsuit

Mozilla and Yahoo! launch high-cost lawsuit

Mozilla and Yahoo! launch high-cost lawsuit

Yahoo, which was purchased earlier this year by Verizon and then combined with AOL to form Oath, signed a contract with Mozilla in 2014 to make it the default search engine for five years.

WELL WE could probably have seen this coming a mile off. Oath, the company that now owns Yahoo, has sued not-for-profit Mozilla after the latter chose to cut short a deal to make Yahoo the default search in Firefox.

Given the excitement surrounding Mozilla's new browser, Yahoo wants to remain the search provider for Mozilla. The agreement required Yahoo to continue paying Mozilla $375 million a year through 2019 even if it dropped it as a search partner, according to tech news site Recode, which obtained a copy of the contract. "When it became clear that continuing to use Yahoo as our default search provider would have a negative impact on all of the above, we exercised our contractual right to terminate the agreement and entered into an agreement with another provider".

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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.

Oath has not yet issued an official response to Mozilla's official response. Attorneys representing Mozilla also did not respond to inquiries. Mozilla has now claimed breach of contract and filed its own cross-complaint. Yahoo is seeking damages for the loss of Mozilla's search business.

Details of the deal were only made public past year, as CEO Marissa Mayer's time at the company came under the microscope while it prepared to sell itself to Verizon. 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.

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While Mozilla emphasizes that the decision to replace Yahoo with Google was exclusively taken to improve the customer experience with the new version of the web browser, Yahoo has knocked the court's door with the hope of saving its limited customer base through the web browser. Mozilla was given a contractual right to terminate the agreement, if Yahoo was found unacceptable for some reason. But at the same time, what has to be considered is that while Mozilla's Firefox has a market share of 13 per cent, at the same time, Google's Chrome has a market share of close to 60 per cent. Reports of widespread security breaches at Yahoo hurt its reputation, according to Mozilla. Verizon executives even encouraged Mozilla to find other search providers, Mozilla said in court documents.

Yahoo Search consistently failed to retain users and search volume over time, reducing the potential revenue [for Mozilla] under the Strategic Agreement. The announcement came in conjunction with the launch of a new browser, Firefox Quantum. Judging from the reported terms, Mozilla had free reign to leave when Verizon acquired Yahoo and still have guaranteed income from the deal. Other parts of Yahoo's business have been renamed "Altaba". Yahoo adds that prior to filing suit, it "demanded that Mozilla take immediate steps to cure its breaches and rescind its termination notice".

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