Google (GOOG) Search Share Loss 'No Surprise' Given Firefox Shift to Yahoo! (YHOO) - Cowen

Cowen and Company is commented on Google (Nasdaq: GOOG)(Nasdaq: GOOGL) following recent reports of U.S. search market share losses.

Analyst John Blackledge said that, including all channels, Google's global search share slipped from 90.1 percent in November down to 89.4 percent in December. Yahoo's (Nasdaq: YHOO) share over the same period moved from 3.8 percent up to 4.2 percent.

Blackledge continued, Including all channels, Google's US search share in 12/14 was 78.6% vs. 79.8% prior month, while YHOO search share in 12/14 rose to 10% from 8.9% prior month, per StatsCounter. The minor share shift is not a surprise given the Firefox switch to Yahoo! as the default search engine in 12/14 (from Google, the default search engine the prior 10 years).

Also, the share loss from the Firefox shift is lower net search revenue for Google given the split on search revenue generated from Firefox searches; we estimate Google received ~25% of search revenue from the prior relationship. Press reports have speculated Firefox generated ~$300MM / year from Google relationship, if we assume Google's cut of 25%, the gross Search revenue was roughly $400MM, with Google generating $100MM in net search revenue annually or 0.25% of total Search revenue.

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