How will the Firefox and Yahoo Merger Effect Google?

If you missed the news, the search engine wars are beginning to heat up again with the recent announcement by Mozilla Firefox. Yahoo is now their preferred search engine. The question on many analysts’ minds is whether or not this partnership will make a dent in Google’s 72.5% search market share (December 2014)?

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So will Firefox and Yahoo Effect Google’s Dominance? 

On the day Firefox moved from Google to Yahoo as their preferred search engine, Yahoo accounted for 29.4% (compared with 9.64% of searches on Firefox 33) of searches using the new Firefox 34. It’s also vital to note before the switch, Google was the default search tool in previous versions.

It could be that the Firefox/Yahoo partnership is about an attempt at getting more of the paid and organic search engine market share. Need proof? Yahoo has retained at the most, 10% of searches in the U.S. Therefore, the merger seems more like a play for advertising revenue in the short-term.

Follow The Money

So why would Firefox and Yahoo partner together? Follow the money. As in paid search. For instance, the recent merger did spike Yahoo’s paid search numbers in December. However, it was a modest 2% increase of all paid search traffic (Google, Yahoo & Bing). Granted, it’s a tiny slice of the pie. However, it’s logical that Yahoo will try to recapture more revenue through paid advertising.

Will It Work?

Many search pundits fear it’s too soon to tell. If you do the math, one plus one almost always equals two, except in the case of this new partnership. Granted, Firefox’s market share is on the rise and peaked at 23.6% in December 2014. So when you combine that with Yahoo’s search share of 9.31% you get what? No, not 32.91%. Instead, it’s a merger of two #2s in both search and browser preference.

Some analysts suggest this isn’t even a fragment of a fair fight because the Firefox/Yahoo partnership is watered down compared to the big G dominance in both search and browser usage.

Will The Firefox/Yahoo Duo Do Better?

In 1962, Avis, the forever #2 rental car company, developed a new marketing strategy confessing their lack of market dominance behind the granddaddy of all time, Hertz.

Their advertising agency (Doyle Dane Bernbach) designed a campaign which toted, “When you’re only #2, you try harder. Or else.” Some theorize that Yahoo will invest heavily in discounting and better managing their paid search partners. No doubt, it’s likely they’ll chisel away ad revenue from Google’s text and display networks.

Betting dollars to donuts, the Firefox/Yahoo play is likely to add more pressure on Google to retain their ad revenues. According to Internetretailer.com’s November 2014 report, paid search spending increased by more than 18% in 2014 ($158.4 million, up from $134.5 million for 2013). Therefore, this merger makes perfect sense for the online dynamic duo.

Is the merger a chink in the Google armor we’re not seeing? Perhaps. Yet, one thing is certain. The Firefox/Yahoo’s merger will bring more competition to paid search.