Mozilla posts 2009 revenue surge: Google diversification issue remains

Mozilla posts 2009 revenue surge: Google diversification issue remains

Summary: Mozilla filed its 2009 audited annual report and revenue surged to $104 million, up 34 percent from a year ago. The big question is whether Mozilla can---or needs to---diversify its revenue away from Google.

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Mozilla filed its 2009 audited annual report and revenue surged to $104 million, up 34 percent from a year ago. The big question is whether Mozilla can---or needs to---diversify its revenue away from Google.

The state of Mozilla's financials is healthy. In brief:

  • Mozilla had revenue of $104.3 million for 2009, up from $77.7 million in 2008 (pdf).
  • Mozilla had an investment loss of $104,000 in 2009 compared to an investment loss of $7.8 million in 2009.
  • The company had 250 employees.
  • Most of its revenue is generated from its search box and payments from the likes of "Google, Yahoo, Yandex, Amazon, eBay and a handful of others."

The problem: The risk is that one contract accounts for most of its revenue. Mozilla didn't name Google, but it's clear how lucrative that little search box is. Mozilla says in its statement of risk:

The Corporation has a contract with a search engine provider for royalties which expires in November 2011. Approximately 86% and 91% of royalties revenue for 2009 and 2008, respectively, was derived from this contract. The receivable from this search engine provider represented 71 percent and 80 percent of the December 31, 2009 and 2008 outstanding receivables, respectively.

And it's possible that Yahoo won't be much of a search contributor given its search pact with Microsoft.

Mozilla's problem is the same as it has been in previous years---it's too reliant on Google. Now Google will continue to back Mozilla at least until Chrome grabs more share. Microsoft's Internet Explorer will continue to have Bing as the default search.

Topics: Enterprise Software, Banking, Browser, Google

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6 comments
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  • RE: Mozilla posts 2009 revenue surge: Google diversification issue remains

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  • what's Chrome got to do with AdWords economics?

    "Now Google will continue to back Mozilla at least until Chrome grabs more share."

    Larry, why do you think that Google's financial relationship with Mozilla would end because Chrome gained market share?

    Google pays ("backs"?) Opera for search traffic. Google pays ("backs"?) Safari for search traffic. Both of those browsers have significantly less share than Mozilla and even less share than Chrome and yet Google continues to pay ("back"?) them handsomely for search traffic.

    It seems to me that Google, like any smart business, is willing to pay a little bit of money to make a lot of money. They pay big browsers like Firefox and they pay tiny browsers like Opera and Safari because all of these browsers, big and small, send traffic to Google's ad platform (search) which makes Google lots of money.

    As long as Google makes more money selling ads than they do paying browser vendors for traffic to their ads, why on earth would they ever stop paying for those "acquisitions"? It's basically a simple AdWords "affiliates" program for browser vendors where everyone wins.

    I'm genuinely curious here. What is it that you think Chrome market share has got to do with Google's AdWords economics?
    asadotzler
    • RE: Mozilla posts 2009 revenue surge: Google diversification issue remains

      @asadotzler

      I agree. The threat is losing market share or the value of searches themselves declining. The first problem is primarily addressed by building the best browser, the second problem is diversifying its revenue stream and not just rely on the "affiliates" revenue you describe.
      andrewjg
  • Not so fast

    The idea that Google would simply abandon its search box relationship with Firefox when Chrome gains significant market share is actually quite silly.

    Here's the thing you guys need to take note of when thinking about browser market share: [i]Global browser usage share figures don't ever tell the whole story about what's really going on[/i]. When you look at browser market share figures on a country by country basis, a [i]very different picture[/i] emerges. Global figures have given the impression that IE dominates every country when that's not even close to being the case. In fact, the only reason IE has such a large margin overall is because of China. It alone accounts for 1 in every 3 IE user, and is now the biggest reason for the continued longevity of IE6. Firefox, despite being pegged as the browser with at least 23% global market share, is actually the most popular browser in a number of countries in at least 3 different continents. In fact, once you take China's huge population out of the equation, Firefox is actually much much closer to IE in usage than you might think. Even Opera has its territories. In Russia and a few of its neighbors, Opera is either the top browser or one of the top 2 browsers; in fact it's ahead of IE in those places.

    Basically, what I'm alluding to is the fact that no one browser dominates every country in the world. Not even IE. Therefore, if you're Google, and you want to maintain that 91% global usage, you're going to need access to as many browsers as you can get your hands on. Relying on Chrome alone would hurt Google's global usage share, because even if Chrome were to gain significant share, it won't get significant share in every country with so many competing browsers out there.
    eMJayy
    • RE: Mozilla posts 2009 revenue surge: Google diversification issue remains

      @eMJayy "IE has such a large margin overall is because of China" URL? Is their IE6 pirated?

      Greg Zeng
      Retired (medical) IT Consultant
      Australian Capital Territory

      Is the
      gregzeng
  • RE: Mozilla posts 2009 revenue surge: Google diversification issue remains

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