Mozilla: Still too dependent on Google for revenue; Can it diversify?

Mozilla: Still too dependent on Google for revenue; Can it diversify?

Summary: Mozilla reported its 2008 audited financials and the organization behind the Firefox browser delivered consolidated revenue of $78.6 million, up 5 percent from 2007. The worry: Google, now a competitor, is still bankrolling Mozilla.

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Mozilla reported its 2008 audited financials and the organization behind the Firefox browser delivered consolidated revenue of $78.6 million, up 5 percent from 2007. And the revenue picture looks even better if you exclude the $7.8 million loss in Mozilla's investment portfolio. The worry: Google, now a competitor, is still bankrolling Mozilla.

Mitchell Baker, chairman of the Mozilla Foundation, outlined the financial picture on her blog. There's a lot of good stuff in there.

To wit:

  • Mozilla funds 200 people working full or part-time on Mozilla.
  • The company has outposts across the globe and Firefox comes in 70 languages.
  • Mozilla is launching messaging software.
  • And Firefox has 110 million daily users as of November.

The worry for me as a Mozilla fan: The foundation's financial stability depends on Google. Baker noted that Mozilla is diversifying its revenue base somewhat, but not enough in my view. She notes on her blog the majority of Mozilla's revenue "is generated from the search functionality in Mozilla Firefox from organizations such as Google, Yahoo, Amazon, eBay, and others."

A trip to the actual audited PDF of Mozilla's financial results and a note on "concentrations of risk" reveals:

Mozilla has a contract with a search engine provider for royalties which expires in November 2011. The contract was recently amended and extended to November 2011. Approximately 91% and 94% of Mozilla's revenue for 2008 and 2007, respectively, was derived from this contract. The receivable from this search engine provider represented 80% and 86% of the December 31, 2008 and 207 outstanding receivables, respectively.

Obviously that search provider is Google. Simply put, Mozilla needs to diversify that revenue base from Google, which funds the foundation, but is increasingly a competitor. Having a rival fund your operations isn't comfortable for any organization. Mozilla’s current situation is like Oracle accounting for the bulk SAP’s revenue. Or Microsoft providing most of Red Hat’s revenue. Or MySpace accounting for the majority of Facebook revenue. You get the idea.

Baker notes in her blog:

The past few years have seen an explosion of innovation and competition in web browsers, demonstrating their critical importance to the Internet experience and marking the success of our mission. In 2008 not only did Microsoft and Apple continue developing their web browsing products, but Google announced and released a web browser of its own. Competition, while uncomfortable, has benefited Mozilla, pushing us to work harder. Mozilla and Firefox continue to prosper, and to reflect our core values. We expect these competitive trends to continue, benefiting the entire Web.

Can Mozilla realistically diversify its revenue base away from Google? That's unclear on many fronts. Google has the dominant market share in search. Yahoo is a non-factor. And Microsoft has the Bing search engine, but isn't likely to support Firefox, a browser that competes (and often wins) against the software giant's Internet Explorer.

Given that landscape Mozilla needs to get creative about that lucrative search box. Of Mozilla's revenue generating partners only Amazon and eBay have the heft to really help diversify the foundation away from Google. Instead of a search box, perhaps Firefox needs a commerce box that would allow eBay and Amazon to pick up some of the revenue slack.

How do you think Mozilla can diversify away from Google?

Topics: Browser, Banking, Enterprise Software, Google

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15 comments
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  • well its in Google best interest ...

    that mozilla is healthy and and kicking ....
    anyone claiming monopole they point out that they
    support Mozilla foundation big time ...

    Google keep its competition alive they should
    do more invest in ubuntu ... so they keep
    competition alive ....
    Quebec-french
  • RE: Mozilla: Still too dependent on Google for revenue; Can it diversify?

    It shouldn't matter what Mozilla's financial status is, they are an open source company so even if they didn't have any income they would still have developers working on their projects. They can still make revenue through selling shirts and other items like they do now in the Mozilla store. Not much to worry about.
    Loverock Davidson
    • But until Google came with its money Firefox had not been able to show

      no web-page correctly.
      Zukuzu
    • But open source is bad

      how can such a community ever hope to compete against such a high quality product like IE with such a flawed methodology as Open Source and licenses that impede innovation like the MPL and GPL.
      Viva la crank dodo
  • Google will make sure that FireFox has all the funds it needs to innovate

    at the highest levels for the foreseeable future, as
    Google does not want to do anything to disrupt the 25%
    market share of FireFox. FireFox IS a high performing
    standards based browser, and they will rapidly implement
    HTML5. Google is focused on growing the percentage of
    alternate, standards based browsers, and to do that they
    need Mozilla healthy.
    DonnieBoy
  • Google needs FF to boost its search share

    The default search engine for FF is Google. Even if you change the default search engine in the toolbar, only the search field changes to your choice. There is a search feature tied to the URL/address bar and that search always uses Google. (BTW, when you switch default search engine in IE, all search points use your new choice, even the URL/address bar.)
    killerbunny
    • Somewhat strongly agree...

      Although, I've found (on MacOSX, and without most
      add-ons, FF URL/address bar does NOT default to
      GOOG search ...I could detail responses, none of which
      is a GOOG search, but I won't - try "foobar",
      "foobar.foobar", and "foobar.com").

      Anyway, FF (oh and by the way, especially Safari, where
      GOOG is the ONLY available search engine) needs to
      steer away from GOOG as the search tool on the
      toolbar. That's the only way to be "brand neutral."

      I'm not sure how the FF folks could present this at
      install time. M$ presented browsers at install time by
      giving the user a choice among all 4: IE, FF, Safari, and
      Opera. Perhaps FF should let the user do something
      similar by letting the user choose a default from among
      a few SEs: GOOG, YHOO, Bing, Ask, Cuil, Yauba, iSeek,
      etc.

      I *thought* FF (Mozilla?) was supposed to be somewhat
      "not-for-profit", ?qu? no? All this GOOG stuff would
      seem to call it into question.
      fjpoblam
      • clarification

        If you enter in search term in FF URL/address bar and that term isn't an obvious website or is ambiguous, FF resorts to Google search, not the selected default engine. Even if you choose the "Manage Search Engine" setting and put another search engine above Google or remove Google entirely (and restart FF), Google gets used. Try it out: Change default search engine of the search field to Yahoo! engine, enter "zongo" in the URL/address bar.
        killerbunny
        • It might be possible to change it

          My friend says that there is a config entry called "keyword.URL" which seems to point to Google. It might be possible to change it to someone else.

          I haven't tried it. I always use the Search box or context menu search (with Context Search add-on) anyway.

          lehnerus2000
          lehnerus2000
  • Author 's analogies flawed, use your head ZDNet, you're better than that .

    To say the Google/Firefox revenue relationship is like MSFT/Red Hat or Oracle/SAP or Facebook/MySpace is a principly flawed analogy in the fact that it only accounts for the sizes of the two organization.

    MSFT is a bigger company and is cash rich. Oracle is a bigger company and is cash rich...ad infinitum.

    The author fails to realize that Mozilla is not the "small fish" in the relationship when it comes to the most crucial factor of comparison: MARKET SHARE

    Firefox holds ~%25 market share, while Chrome has ~%3.5. The fact is, Mozilla has more time than the author thinks. Google needs to have more, and more users on browsers capable of canvas, HTML5, CSS3 and all the rest of the new open web technologies. If it stopped funding Firefox they would essentially be shooting a few of their key emerging developments in the foot, Google Wave is a perfect example.

    Sure s shift toward revenue diversification for Mozilla is needed, but it's fine if it takes 2-4 years to fully realize. "And that's the Word"


    PS - Now if most of Mozilla's money came from Microsoft, that would be a different ball game...




    csuwldcat
  • Google needs Firefox to get HTML5 features standardized by the W3C

    For specifications to become official W3C Recommendations, there needs to be two compatible impelementations (i.e. browsers) of the specification. All the pieces required for Google's vision (offline web app support, etc) are in HTML5 and other specs. (Google's Ian Hickson is the primary author of HTML5 -- he has been employeed by Google for several years for the sole purpose of writing W3C specs, even back before Chrome was announced.) Since there need to be two compatible implementations of the specs, Google needs to keep Firefox around to be the other implementor (Webkit being the first). That is probably the real reason they're keeping Firefox alive.
    PB_z
    • yup, FF helps Google push standards it needs

      to make web apps successful, viable
      killerbunny
  • Google only has one interest: self-interest

    Mozilla should work on getting advertising revenues in the same way that Google does. More simply, they should ask for contributions. With 110 million users, an average of $1 per user would be all they need. I would be willing to contribute more than that to keep them independent and sufficiently funded to keep progressing Firefox and their other projects.
    jorjitop
  • RE: Mozilla: Still too dependent on Google for revenue; Can it diversify?

    Larry,

    you discount the question of whether the ultimate goal is for Chrome + Firefox + Safari to completely rout IE. And I suspect the answer from Apple, Google, and every minor actor in this battle is yes; usurp the one true browser on their own platform.

    Google might be a competitor in product space, but as an advertising behemoth, they couldn't give a whits ass if that advertising revenue benefits a competing software project; just look at the tens of millions they pour into open source.
    wroweil
  • Mozilla can diversify, and the mobile space is important

    Mozilla can learn a big lesson from Opera, who despite having a small market share, have equal (or perhaps more) revenue than the former, due to a strong mobile presence. Licensing the browser to the mobile providers can result in a diversified finance portfolio, so as to speak. However, it has to improve its Gecko engine, which frankly trails behind Opera's Presto by a large margin for low end devices. I know that people are going to point me towards Nokia Maemo based devices, but really, most mobile devices do not have the same power. Two points are Mozilla's favour, however: they are presently doing great work in reducing their resource footprint and two, Firefox has a brand recognition value which may help it, along with fawning journalists who can give free publicity. It remains to be seen whether Mozilla can use it to their advantage.
    Another alternative is to monetize Thunderbird and Sunbird as an Outlook alternative (collaborate with IBM or Oracle Sun), but it is extremely difficult to take on Microsoft in this space.
    nilotpal_c