Why Google Isn’t Concerned about Mozilla’s Deal with Yahoo



Google isn’t concerned about Mozilla’s deal with Yahoo

In the last part of this series, we discussed how Mozilla’s deal with Yahoo (YHOO) made it the default search engine for Firefox users in the US. We also discussed how this deal impacted Google (GOOG) (GOOGL).

The benefit of having a default search engine associated with a browser is that you can type keywords directly into the browser without going through a separate search engine. Having to steer through a search engine—like Google, Microsoft’s (MSFT) Bing, or Yahoo—creates an inconvenient extra step for users. Directly typing in keywords saves you that extra step.

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However, Google thinks differently. It isn’t overly concerned about these developments. During the 4Q14 earnings call, Google’s management mentioned that “Partnerships have to be win-wins, and in that sense, right, we’ll always look for those combinations. But also at the end of the day, there’s a second piece of the strategy, which is, as I said earlier, building amazing product, because if you build the amazing products then people want to distribute you product.”

Google is confident that if its product is great, then people will find a way to use it.

Google managed to halt its market share declines

This confidence started to reflect in Google’s market share numbers. In the last part of this series, we discussed how Google lost its share of the US search market to Yahoo between November 2014 and January 2015.

However, Google’s market share increased in February. According to a report from StatCounter, and as the above chart shows, Google’s share of the US search market for Firefox users increased from 63.9% in January 2015 to 65.1% in February 2015. Meanwhile, Yahoo’s share declined from 28.3% to 27.3%. Microsoft’s Bing share also declined a little.

This shows that Google managed to halt the trend of its market share decline. This is good news for Google’s investors. If you’re bullish about Google, you could invest in the Technology SPDR (XLK). XLK invests 3.8% of its holdings in Google.


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