Oath and Mozilla Are in a Legal Battle Over a Yahoo Search Deal

Kara Swisher:

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.

★ Wednesday, 6 December 2017