Mozilla surprised the Internet today and announced that it has renewed its search box license with Google being the default search provider by three years until 2014.
Mozilla CEO Gary Kovacs seemed to be especially happy about the deal as he tweeted that it is "a great day for the web."
Given the fact that Mozilla's livelihood depends on Google's search revenues, it is good news that Mozilla was able to renew the agreement. There is no information how much money Google paid to Mozilla in 2011, but we know that 84 percent of $121.1 million in licensing fees in 2010 came from Google. There was some speculation that Google may have ditched Mozilla, but Firefox still holds somewhere between 20 and 25 percent browser market share and it would be foolish for Google to let that go and allow Microsoft to pick up that share for Bing. Search remains Google's core revenue source and as long as Mozilla has substantial share it is unlikely that Google will drop Mozilla.
Mozilla said it signed a "significant and mutually beneficial revenue agreement with Google." Gary Kovacs added that "this new agreement extends our long term search relationship with Google for at least three additional years." There was no information on the financial terms, but it seems that Mozilla's funding has been secured until the end of 2014, which should give the organization breathing room to build up its browser platform strategy.