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Should Mozilla go public? In a word: No.

By | January 3, 2008, 7:34am PST

Mozilla, the organization behind Firefox, should go public, cash in on its browser success and grab more resources to fight Microsoft. At least that’s Henry Blodget’s theory.

Blodget argues that Mozilla could be worth a lot on the public market and may go public this year or next. While acknowledging the perils of going public– primarily Sarbanes-Oxley costs–Blodget says that Mozilla could build a nice business simply by slapping an ad or two on the default landing page. And for good measure Blodget says that Firefox should buy the Netscape brand and rename the company.

Hmmm. Is Blodget having dot-com boom fantasies again? Maybe not–although renaming a company after a dead brand like Netscape doesn’t make sense. Dead brands rarely come back. WordPerfect? Pan-Am? Indeed, Mozilla could build a nice business–in fact you could argue that it already has. But that doesn’t mean it should go public.

As currently constituted Mozilla has one customer really–Google. And all the financial reasoning aside–and Blodget provides a lot of good points–it’s unclear that Mozilla could keep its mojo as a public company. Why? There are distractions. Lots of them. Annoying analysts. Annoying conference calls. Press sniping because you missed a made up revenue target by $50,000. Sarbanes-Oxley. Poison pills. Financial processes. An army of lawyers. There’s a reason Mozilla has been successful: All it has to do is herd a bunch of volunteer developers and create a good product (that’s a gross simplification). As a public company it would be distracted and the product would suffer. You think Firefox can be weighty now? Just wait until Mozilla would have to monetize it.

If Thunderbird had more traction perhaps Mozilla would have legs as a public company, but the browser business is best kept private. I’d love to be more optimistic, but Netscape got creamed. Opera isn’t exactly knocking the ball out of the park. And Firefox going public would only accomplish one thing: Providing a market price so Google could buy it.

Why not cash out? Mozilla the movement is hard for Microsoft to defend against. Mozilla the public company is outgunned on every level.

Perhaps I’m naive–and way out of character given that I’m a financial nerd–but I like Mozilla as a foundation, albeit a well heeled one.

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Topics

Mozilla Corp., Blodget, Web Browsers, Sarbanes-Oxley, Branding, Regulatory Compliance, Internet, Regulations, Government, Financial Accounting, Finance, Marketing, Human Resources, Policies And Procedures, Larry Dignan

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic.

Disclosure

Larry Dignan

Larry Dignan has nothing to disclose. He doesn’t hold investments in the technology companies he covers.

Biography

Larry Dignan

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CNET News.com. Larry has covered the technology and financial services industry since 1995, publishing articles in WallStreetWeek.com, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism and the University of Delaware.

For daily updates, follow Larry on Twitter.

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The thief Henry Blodget
drobinow 7th Jan 2008
Why should the fact that he is a criminal be a reason to ignore him?
View in thread
0 Votes
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Being open source is better than being public
ariepert 3rd Jan 2008
Being open source is just a different form of being public. It is just a matter of who you want calling the shots - the developers, or the accountants. I think the developers will do a much better job of building a browser.
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Should ZDNet talkbacks not have an Edit function? (NT)
ju1ce 3rd Jan 2008
(NT)
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yes, it should go public!
Linux Geek 3rd Jan 2008
Folks, these guys that are afraid of Mozilla going public are the same guys with the same arguments of Google going public!...
OSS rocks the software and the wallet!
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I dunno
CobraA1 3rd Jan 2008
I dunno, how well would open source stuff really work if they went public? Now instead of a large community of people having a say in what direction it goes, it turns into a few rich people deciding what direction it goes . . . going public doesn't exactly sound like the open source way.
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going public just means selling shares to the public...
shryko 4th Jan 2008
If they really wanted to, they could be pickier and instead of an IPO, they just do it as a progressive methodical system... ie. announce that over 3 years, they'll sell off X shares to people, and it's done by competition, they choose who gets shares...

means that microsoft couldn't buy them up, and really, they could ensure that the "ownership" is so thoroughly distributed, that it's not the normal "public" company, but a new kind :P
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RE: Should Mozilla go public? In a word: No.
IT_Guy_z 3rd Jan 2008
Mozilla is a company that has made strong footings for itself in the browser market, enough for it to go head to head with IE, and even above it. By going public, the biggest challenge that it will have to face, as has been pointed out, is the exponential increase in the factors that would start to effect its performance. Red-tape, procedures, and paperwork, all serve to bring productivity down; and a great factor in the success of Mozilla as a company right now is the lack of all this "organizational hierarchy".

and of course, it could not have been stated any better:

: "And Firefox going public would only accomplish one thing: Providing a market price so Google could buy it."

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Not sure what is going on here...
IT_Guy_z 3rd Jan 2008
...this is NOT my post.
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Re; The great Henry Blodget...
IT_Guy_z 3rd Jan 2008
From Wikipedia..."In 2002, Eliot Spitzer published Merrill Lynch e-mails in which Blodget allegedly gave assessments about stocks, which conflicted with what was publicly published.[4] In 2003, he was charged with civil securities fraud by the U.S. Securities and Exchange Commission. He settled without admitting or denying the allegations and was subsequently banned from the securities industry for life."

Why is anyone paying attention to this thief?
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The thief Henry Blodget
drobinow 7th Jan 2008
Why should the fact that he is a criminal be a reason to ignore him?
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The problem with going public
Michael Kelly 3rd Jan 2008
is that you have to focus on stockholders' short term goals rather than maintain all of your focus on long term growth and quality control. Mozilla particularly needs to focus on the quality control right now if they're hoping to maintain the growth. IMHO they've been lucky to get the growth they have on product features and the perception of quality rather than actual quality. Perhaps once they get that under control they can reevaluate the situation (and the market).
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becoming a public company would kill what makes Mozilla great...
JonathonDoe 4th Jan 2008
namely, that decisions are made by a meritocracy of the community of technical contributors and developers.

As an organization, Mozilla is freed of many business constraints and can focus on their actual objective; to build better software based on an open-source model.

However, if they were a publicly traded company they would suddenly become slaves to many other factors. As a result bureaucracy would set in and regulation would stifle development until -- at last -- the company becomes moribund, and either slowly dies or begins producing pablum instead of product.

Open Source is about community accomplishments, while a publicly traded company is all about share-holder profits. I'm not saying one is better than the other, just that they are different, have different needs, and produce different results.

Just my $0.02 USD...

Regards,
Jon
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Go public and die
professordnm 4th Jan 2008
If Mozilla goes public, it will die. The altruism that now exists within the open source community will be vanquished by a board of directors, and investors, who will want to see Mozilla make money as fast as possible in order to please the shareholders. The spirit behind Mozilla will no longer be 'captain of its ship', very likely resulting in the same outcome as the AOL-Netscape business.

No, keep Mozilla free and open if you want it to be around two, three years from now.
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hmm....
Linux Geek 4th Jan 2008
Have you heard of a company called 'Red Hat".
They keep the share holders happy delivering great OSS software.
How about google?...
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The exceptions...
Dr. John 4th Jan 2008
The exceptions prove the rule, while making a statement regarding comparing onions and turnips with pears.

Red Hat was already tops in Linux server distros when they went public. Google was already tops in search when they went public. And, in both cases, the finances freed by the IPO allowed them to comfortably solidify and entrench their positions. They were, and are, the pinnacle of their fields, and are firmly rooted there.

Mozilla is not tops in any of their fields. They need to remain lean and mean, capable of responding rapidly to changes and challenges. That just doesn't happen with boards and stock holders running things.

When/If Mozilla becomes number one in their field(s), then it might be time for an IPO.
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As we all know,
mhenriday 4th Jan 2008
it's hard to predict the future (the past is somewhat easier if one has control over the printing of history books), but Dan Farber and Larry Dignan's argument sounds pretty convincing to me. The thing Mozilla developers should be concentrating on now is readying Firefox 3 for release in the not-too-distant future....

Henri

PS : An edit feature would be nice....

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