Presumably with a straight face Marshall Kirkpartrick over at Read/Write Web writes about Opera switching it’s default search provider from Yahoo! to Google saying “Presumably there’s some money changing hands.”
Ya think? Search distribution is a big money game. Google pays $10 per box to Dell for pre-installing the Google Toolbar and pays Mozilla just under $100 million a year. Market rates for toolbar or embedded search box (ie. built in search box in Opera or Mozilla) distribution are steep – Google pays anywhere from $1.50 to $10 per new user from what I understand with most top tier deals in the $3-6 per user range. I’ve seen estimates that Google makes $12 per user per year per toolbar or embedded search box installation.
What’s interesting is how Google’s dominance becomes self-reinforcing. Because Google makes more money per search then Yahoo! it can always outbid Yahoo! for distribution deals (on a rational economic basis that is Yahoo! could always overpay). So no one should be surprised when Google beats Yahoo! on a financial deal based on search economics. Yahoo! should lose everyone of them. Now this once again leads us down the Google paid search monopoly path where Google buys market share at a rate no one else can pay. Just not in the bullying fashion that MSFT was accussed of back in the day.