NEW YORK (TheStreet) -- Most people have yawned about the search partnership announced last night between Yahoo! (YHOO) and Mozilla, the maker of the Firefox browser. But it could be a big deal for Yahoo! investors and might lead to an increase of $11 per share in value over the next few months. Here's why.
According to one report, Google (GOOGL) had been paying Mozilla (a non-profit) $300 million a year for the prior search partnership. When Google launched its own Chrome browser a few years ago, it's clear this upset Mozilla and this gave Yahoo! CEO Marissa Mayer her opportunity to go after this partnership.
But in hindsight, Google's decision to push Chrome has been the right one. In the desktop browser world, Chrome has grown from 15% in 2011 to 45% today. Over that time, Firefox's browser share has dropped from 30% to 19%, via StatCountet.
Mayer was able to sell Mozilla that Yahoo! won't compete with it as a browser and that she'll promote its products on Yahoo!.
The critics will say Firefox is yesterday's browser and it has no presence in mobile while Yahoo! is just picking up the scraps that have fallen off Google's table.
My response is that for Yahoo! -- and for Yahoo!'s stock price -- this still could be a real positive thing.
Firefox still has 19% share among desktop browsers. Yes, its share has dropped in recent years at the expense of Chrome but it's declining at a much slower rate than Microsoft's (MSFT) Internet Explorer. In fact, it's possible that Firefox might pass IE in share next year. Next year, Firefox still should hold close to that share.