As I reported at the time, under terms of a contract, whoever
acquired Yahoo was required to pay Mozilla annual payments of $375
million through 2019, even if it does not think the buyer was one
it wanted to work with and walked away. It was Mayer who struck
the deal in late 2014 to become the default search engine on
the well-known Firefox browser in the U.S.
Mozilla switched to Yahoo from Google after Mayer offered a much
more lucrative deal that included an unprecedented term to protect
Mozilla in a change-of-control scenario. It was a scenario that
Mayer never thought would happen, which is why she apparently
pushed through the problematic deal point.
According to the change-of-control term, 9.1 in the agreement,
Mozilla had the right to leave the partnership if — under its
sole discretion and in a certain time period — it did not deem
the new partner acceptable. And if it did that, even if it struck
another search deal, Yahoo was still obligated to pay out annual
revenue guarantees of $375 million.
That was… not a good deal for Yahoo.