there is a favorable interpretation of this for Meyer.

they're in a bidding war for mozilla with Google and Bing. Yahoo needs their traffic and is willing to exceed the price of the other buyers.. but it's well known that Yahoo has been struggling for years. So a cautious Mozilla would not take their offer unless it was substantially higher, or had some kind of protection if yahoo fails. Yahoo offers this clause, since Mozilla wouldn't do the deal otherwise.

Remember Mozilla wasn't desperate. They could have accepted another offer for at least $300m/year. Yahoo would have been seen as higher risk... people talk every few months about yahoo like it's a miracle they still exist.

Now, I don't know what happened. but yahoo agreeing to this does not necessarily mean Marissa is incompetent or didn't care or whatever.

Right. I have a feeling that this is shocking mostly because of the context, and not necessarily because of the agreement itself. How many other high risk agreements have been made in the world? I'm pretty sure most of the human universe runs on this kind of thing, we just either don't find out about it because it pays off, or it doesn't matter, because the context isn't exciting. I said "wow" when I first read it, but only because of what I know about the whole Yahoo and Marissa situation, not because it seems like a particularly crazy deal by itself.

> but just had no clue as to their likelihood

Likelihood is probability based on factors, each of which has different weight and is again based on other factors. In hindsight, the likelihood seems obvious; when she was making the decision, not so much.