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July 7, 2016 10:00 pm

Mozilla Could Walk Away and Still Get More Than $1 Billion If It Doesn't Like Yahoo's Buyer

Kara Swisher, reporting for Recode: Under terms of a contract that has been seen by Recode, whoever acquires Yahoo might have to pay Mozilla annual payments of $375 million through 2019 if it does not think the buyer is one it wants to work with and walks away. That's according to a clause in the Silicon Valley giant's official agreement with the browser maker that CEO Marissa Mayer struck in late 2014 to become the default search engine on the well-known Firefox browser in the U.S. Mozilla switched to Yahoo from Google after Mayer offered a much more lucrative deal that included what potential buyers of Yahoo say is an unprecedented term to protect Mozilla in a change-of-control scenario. It was a scenario that Mayer never thought would happen, which is why she apparently pushed through the possibly problematic deal point. 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.

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