Firefox faces uncertain future as Google deal apparently ends

It hasn't been a good year for Firefox. Mozilla has lost share to Google, it's lost the loyalty of enterprise customers, and it's lost key talent. And a deal with Google that supplied 84% of its revenue last year was scheduled to end in November. Can Firefox avoid a slide into irrelevance?
Written by Ed Bott, Senior Contributing Editor

It hasn't been a good year for Mozilla and its flagship product, the Firefox browser.

Firefox continues to lose share to Google Chrome. Statistics from Net Market Share show the decline, with Firefox plunging from 25% to 22% and Chrome rising from under 5% to more than 18% during the last two years.

Firefox is now on an accelerated development schedule that has alienated enterprise customers.

One of its key managers, Mike Shaver, left in September. How important was he to the developers? The current version of the Firefox road map still includes a big bold TODO item under the "How to ship faster" heading:

Process change suggestions (w/Shaver)

And the deal with Mozilla's biggest financial backer is in question. A search partnership with Google has historically been Mozilla's greatest source of income. In its most recent financial statement, prepared in August and published recently online (see this PDF copy), the Mozilla Foundation won't even mention Google's name:

The Corporation has a contract with a search engine provider for royalties which expires November 2011. Approximately 84% and 86% of royalty revenue for 2010 and 2009, respectively, was derived from this contract.

In the accompanying FAQ, Mozilla provides a cryptic non-answer to the question:

What is the status of the organization’s search partnerships?

We currently have partnerships with a number of search providers that differ by market. Our largest contract, with Google, comes up for renewal in November. We have every confidence that search partnerships will remain a solid generator of revenue for Mozilla for the foreseeable future.

Back in July, I sent an e-mail to Mozilla PR with a number of questions about the Mozilla-Google financial agreement.

  • The Mozilla-Google search arrangement ends in 2011, according to the most recent public disclosure I was able to find. Is that date accurate?
  • Are Mozilla and Google in discussions to extend that arrangement further, and if so would it be under revised terms?
  • Has Mozilla made contingency plans in the event that Google decides to end or scale back its support?

A Mozilla spokesperson replied with a link to the 2009 financial FAQ, which contained equally vague language: "We believe that search providers will remain a solid generator of revenue for Mozilla for the foreseeable future."

On December 1, I asked Mozilla PR for news on whether the agreement with Google was renegotiated or whether the foundation has any further update to that FAQ. I received a crisp reply:

We currently do not have an update to share.

In 2010, 84% of Mozilla's $123 million in revenue came directly from Google. That's roughly $100 million in funds that will vanish or be drastically cut if the deal is either not renewed or is renegotiated on terms that are less favorable to Mozilla.

When the original three-year partnership deal was signed in 2008, Chrome was still on the drawing boards. Today, it is Google's most prominent software product, and it is rapidly replacing Firefox as the alternative browser on every platform.

Back in March, I suggested that Firefox won't survive:

So where does that leave Firefox? It doesn’t have an app ecosystem or a loyal core of developers. Extensions? Those were worth bragging about in 2005, but in 2012 the story is apps. Businesses and consumers will want to use the same browser that powers their installed apps. In the PC space, that means Google or Microsoft. It doesn’t leave room for a third player.

Mozilla knows this. The last item on its latest roadmap highlights the need to "plan for a future where Desktop, Mobile and Web Apps run on a common platform" and "to design and architect towards this eventual outcome." But the last line notes that "implementation of this is not a priority."

With its biggest source of revenue likely to dry up and a platform that is under attack from Microsoft and Google, how long will it take before Firefox slides into irrelevance?

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