Yahoo growth stalls months after Mozilla deal

Marissa Mayer, Yahoo CEO

Marissa Mayer, Yahoo CEO, discusses a new search partnership during the company's annual shareholder meeting in Santa Clara, California, on June 24, 2015.

Credit: IDG News Service/Zach Miners

May be barometer for Java bundling deal

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Yahoo's share gains since November from a deal with Mozilla may be a clue about whether the search company can attract more users through the just-announced contract to change Internet Explorer's and Chrome's default search through installations of Oracle's Java.

Although the news of the Yahoo-Oracle partnership got the lion's share of attention, CEO Marissa Mayer also used last week's shareholder meeting to mention the Mozilla pact.

The five-year contract with Mozilla, the maker of Firefox, has boosted Yahoo's share of the U.S. search market, but growth has stalled for the last three months, according to measurement company comScore.

On Wednesday, Mayer asserted that the Mozilla deal -- negotiated last fall -- was "profitable," but didn't provide any numbers to back that up. Neither Yahoo nor Mozilla has disclosed how much the former paid to become Firefox's default search engine in the U.S.

By comScore's measurement, Yahoo accounted for 12.7% of all U.S. searches in May, the same share it controlled in both March and April. Although that was 2.5 percentage points higher than in November 2014 -- before Firefox began urging users to accept Yahoo as the default -- and represented a six-month increase of 25%, May's share was down from the January peak of 13%.

From all indications, Yahoo has gotten as much out of the Firefox deal as it will likely get. The flip-side is that Yahoo has hung onto most of what it grabbed from Google -- Firefox's previous default -- even as Google has tried to get users to return.

For May, comScore pegged Google's share at 64.1%, down one-tenth of a percentage point from the month prior. Microsoft's share rose that one-tenth of a point to end May at 20.3%. Because Bing powers Yahoo's search results, Microsoft's technology accounted for 31.4% of all U.S. searches, still less than half Google's 65.2%.

The partnership with Oracle that Mayer announced Wednesday has the potential for boosting Yahoo's search share significantly more than the one with Mozilla. But that's not guaranteed.

When users install or upgrade Oracle's Java, they're told that Microsoft Internet Explorer's (IE) and Google Chrome's default search engine will be changed to Yahoo. A pre-checked box on the dialog means that users must notice, then opt out of the switcheroo to prevent the change. People quickly stepping through a Java installation or upgrade to run a critical app -- like their online banking connection -- could easily miss the bundling and end up with an engine they don't want.

Together, IE and Chrome have a much larger share than Firefox, both globally and in the U.S. For instance, StatCounter's May numbers pegged the two at a combined 67% usage share in the U.S., while rival analytics vendor Net Applications marked the pair at a joint 82% globally.

If Yahoo gets swapped in as the default search engine on only 10% of the IE and Chrome browsers equipped with Java -- Oracle's software, Mayer claimed, is on 89% of all personal computers -- it would push Yahoo to about 16.5% of the worldwide search market, making it the clear No. 2 behind Google and well ahead of No. 3 Bing in Net Applications' measurement.

No wonder Mayer said of the Oracle deal: "It's a great distribution opportunity for us."

But it could easily backfire. Users have long lambasted both Oracle and Ask.com, which was just replaced by Yahoo, as shameless trickery because of the automatic opt-in.

More notable was that the bundling with Java never did much for Ask.com: StatCounter's May numbers had Ask with a 0.7% share -- the same as a year ago -- while Net Applications tapped it at an even lower 0.1%.

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