Mozilla and Yahoo announced earlier this week that Yahoo Search will become the default search provider for Firefox users in the United States beginning in December. This announcement comes after a decade of Firefox using Google as their global default search tool, and is part of Mozilla's decision to use different search providers in different countries. Yahoo will obviously see an increase in search share from this deal, and will be able to draw ad dollars from the added click volume. But just how much do they stand to gain once we consider the degree to which users change their default search provider settings?
Search Ad Traffic Share by Browser
As a starting point, we need to know how much search ad traffic is produced by Firefox users. The initial media reports on the Yahoo deal offered a range of traffic share figures for Firefox that ran from about 10% to 15%. Looking at RKG data, we find that Firefox produces about 10% of U.S. search ad clicks, which is at the low end of that range, but in line with figures from Statcounter. So, 10% is probably a decent upper limit of how much search ad traffic Yahoo could gain from it's deal with Mozilla. But, Yahoo already does pretty well on Firefox and, more importantly, we shouldn't expect all Firefox users to keep Yahoo as their search option once the switch is made.
How 'Sticky' are Default Search Options?
Being the default search provider for a browser, device or OS does have its benefits. We only need to assess how well Bing does when its the default search option to see this. If we look at traffic originating from the domains of the three major search engines in the U.S., we find that the search ad traffic share for Bing.com is about 12% for the average site overall. But on Kindle Fire tablets and Internet Explorer browsers (where Bing is the default search option), Bing's traffic share is 48% and 34%, respectively. Put another way, when it is the default search option, Bing's traffic share is three to four times higher than it is overall. Now, if we exclude Internet Explorer traffic, Bing's share of search ad clicks would fall to about 5%. So, the 34% share it does receive on IE is actually about seven times higher than the share it gets on other browsers and operating systems. Then again, even with such a high multiplier, it's still only 34%.
How Yahoo Fares Across Browsers
Yahoo's share of search ad traffic is more consistent across major browsers because it hasn't had default status to boost it's performance. Overall, Yahoo.com generates about 15% of paid search clicks that take place on the three major engine's sites. It's share of Firefox clicks is already a little better than that at about 16%: So, can we use Bing's experience with Internet Explorer and assume Yahoo's share of Firefox traffic will be seven times higher once the switch is made? Obviously not, since that would mean Yahoo's share of Firefox ad clicks would be over 100%. It's probably more reasonable to flip the question and consider how low is Google's share likely to fall? On Internet Explorer, Google still produces about half of search ad clicks. Just a hunch, but we'd guess that Internet Explorer users are less likely than Firefox users will be to switch from a non-Google search option to Google. Even so, let's give Google just half of Firefox share moving forward, allow Bing to keep its current share, and give Yahoo what's left. That would give Yahoo a 43% share of Firefox ad clicks, which equates to a little over 4% of the search ad clicks that take place on the three main engines. Subtracting out Yahoo's current share of Firefox volume gives it a share gain of about 2.7%. Finally, after accounting for search partner volume, Yahoo would be picking up just over 2% of total U.S. search ad clicks. Importantly, it's still unclear whether or not Mozilla will push out an update that will change the default search option for existing users or whether the switch will only take place for new Firefox installs. If it's the latter, the short-term impact will be much smaller.
A Win for Yahoo? Hard to say.
While search engines are always looking for new traffic, this Firefox traffic will come at an unknown cost to Yahoo, who will be paying Mozilla to serve as the default search provider. Thus, in terms of the impact on Yahoo's bottom line, Yahoo needs to be able to monetize enough of this traffic to be able to cover the cost of their deal with Mozilla. The only reference point for the cost of such a deal is what Google was paying to be the global default search tool for Firefox, which reportedly stood at $274 million in 2012. Yahoo's deal is only for the United States and so it's difficult to speculate what kind of price tag that comes with, but the figure they're paying is likely to be significant. Yahoo's ability to monetize this new traffic, which historically has lagged behind that of Google, will be key in whether or not the dollars and cents of the deal shake out in Yahoo's favor in the long run. One upside to the traffic share estimates above is that the Firefox traffic is almost entirely from desktop searches, which carry a more favorable average cost-per-click than mobile searches. Paid search marketers and financial analysts alike will be anxious to see just how much spend drops on Google, and whether Yahoo is able to pick up the slack.