Another Yahoo! Blunder Could Net Mozilla $1 Billion -- Tech Roundup

Part of Yahoo!'s arrangement with Mozilla allows the latter to collect $375 million per year through 2019 -- even if it walks away after someone buys Yahoo!.
By Bret Kenwell ,

In another showing of how Yahoo! (YHOO) CEO Marissa Mayer has likely irritated investors, the company's search deal with Mozilla could cause some financial headaches down the line.

The company has a contract clause -- which was "personally struck" by Mayer, according to Re/Code -- that allows it to collect $375 million per year through 2019 if it doesn't like Yahoo!'s winning bidder.

Assuming that doesn't include 2016, the total comes out to $1.125 billion for Mozilla to simply walk away.

Huh.

Again, from Re/Code, which did a fantastic job breaking it down, "According to the change-of-control term, 9.1 in the agreement, Mozilla has the right to leave the partnership if - under its sole discretion and in a certain time period - it did not deem the new partner acceptable. And if it did that, even if it struck another search deal, Yahoo is still obligated to pay out annual revenue guarantees of $375 million."

Mayer tried to fight back against Alphabet's (GOOGL) - Get Report Google and Microsoft's (MSFT) - Get Report Bing, by shelling out heaps of cash to Mozilla. Obviously, that plan didn't work and can now be shelved with many of the other Yahoo! initiatives that haven't quite panned out.

It's just one more hiccup in what's bound to uncover more issues for potential bidders to decide if they want the headaches - and how much those headaches are worth.

Shares of Yahoo! closed at $37.74 Friday, up 0.6%.

It's been a while since we've heard about tech companies vs. "big brother" when it comes to user privacy and fending off the government. The FBI and other U.S. government branches feel that Apple (AAPL) - Get Report and others should help them crack into devices of known criminals in order to uncover more of the situation or find others in their network.

Of course, the tech companies are worried about the precent this will set going forward and instead of simply refusing to help, they've dug in their heels even more. The latest example comes from Facebook (FB) - Get Report , which has made its Messenger app fully encrypted.

The end-to-end encryption will make it impossible for others to read users' messages. This includes law enforcement and yes, even includes Facebook itself.

The company is unveiling the feature to a small group of test users. Users should also realize that this is optional, meaning they don't have to use the encryption if they don't want it. End-to-end encryption prevents chatbot and payment features, so some users may not want to enable to enhanced security.

It's just one more way that Facebook and the rest of Silicon Valley continues to up their user privacy game, while the government desperately tries to keep pace. Earlier this year, Facebook's WhatsApp property also announced that is has end-to-end encryption as well.

Shares of Facebook closed at $117.24 Friday, up 1.2%.

Last year a New York Times article slammed Amazon (AMZN) - Get Report for its cutthroat and hostile work environment. However, the company is making strides to prove that that isn't the necessarily the case. While Amazon can be a tough place to work, it's not quite the dark e-commerce jungle that it was made out to be.

The company now offers guided tours of its headquarters, located in Seattle. It also hosts open houses twice per month at six of its fulfillment centers located throughout the U.S.

Amazon will also point out that one of its empty buildings serves as a shelter for homeless families, while plans exists for the company to heat its new campus with recycled waste.

While some of these features/perks/utilities may not exactly say "we're a friendly, happy, super-dooper nice work environment," it does help break the potential mindset that Amazon is a cold, hard dungeon socking its cash back as CEO Jeff Bezos cracks his whip on helpless employees.

Employees can even bring dogs to work, a nice perk, and a lot of barking, considering Amazon will soon represent roughly 15% of all of Seattle's office space. Shares of Amazon closed at $745.81 Friday, up 1.25%.

Alphabet, Apple and Facebook are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells GOOGL, AAPL or FB? Learn more now.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

Loading ...