Web erupts with Mozilla revenue speculation

Mozilla says that money is 'one of the last things it worries about' as rumours about its revenue spread
Written by Ingrid Marson, Contributor

The Mozilla Corporation, the commercial arm of the Mozilla Foundation, claims that despite the success of its various online applications, it is not focused on making profits but creating strong products.

Responding to online speculation around the company's actual earnings, Christopher Blizzard, who is on the board of the Mozilla Corporation, claimed on Tuesday that money is just a "tool" that allows the organisation to direct its own development and "make a great product".

"Money is one of the last things we worry about and people shouldn't get hung up on the numbers, except to realise that it gives us options," he said.

Blizzard added that an earnings figure of $72m (£41m) quoted on some blogs was incorrect. "I won't comment on the dollar amount except to say that it's [$72m] not correct, though not off by an order of magnitude. I also won't comment on sources of that money, except to say that some of the assertions that I've seen in the comments are pretty far off, both in terms of numbers and sources," he wrote in his blog.

The Mozilla Foundation exists as a Californian not-for-profit organisation and receives donations in a similar way to a charity. This makes the issue of profit controversial. There has been intense speculation recently on exactly how much the Mozilla Corporation, and the wider Foundation, makes out of its Firefox browser and how it spends the money.

On Monday, Jason Calacanis, the chief executive of blogging network Weblogs, wrote in his blog that an unnamed source at BarCampLA told him that the Mozilla Corporation made $72m last year and is on target to have 120 employees this year, although he admitted that he had been unable to confirm these figures.

Calacanis claimed that when a Firefox user does a Google search using the browser's search box, Mozilla receives approximately 80 percent of the ad revenue from any associated ad clicks.

The gossip was soon picked up by a number of blogs and news sites, including Digg, and attracted thousands of comments. The majority of people commenting on Digg were positive about the news, claiming that Mozilla deserved the money. Some people, however, questioned how the organisation managed to spend that amount of money.

The Mozilla Foundation was unable to provide ZDNet UK more information on its revenues and how it spends its money on Thursday, but various Mozilla employees have commented on the figures in their respective blogs.

Mitchell Baker, the chief executive of the Mozilla Corporation, stated in a blog posting on Wednesday, that the search feature in Firefox "generates revenue in the tens of millions of dollars".

She said the money generated from the search providers has been used to "build the capabilities of the Mozilla project".

"We've hired people. We've built a much more robust infrastructure. (This may not sound like a big deal, but the server load of what we're doing with update and extensions is significant.)," she said.

The Mozilla Corporation has the equivalent of 40 full-time staff working for it, according to Baker, although she did not comment on the organisation's expected growth.

More information, at least on its past revenues and spending habits, can be gleaned from its 990 Form, which US charities above a certain size are obliged to file with the US tax agency. The latest 990 Form that is available for the Mozilla Foundation is for the 2004 calendar year, the year Firefox hit 1.0.

Mozilla's 990 form, which was filed in November 2005, states that it made $5.8m in 2004, of which $4.9m came from services it charged for, which will include revenues from Google ads. Its expenses that year totalled $2.3m, of which $1.5m went on employee wages. This works out as approximately $100,000 for each of the 14 employees it declared on the form. The Foundation ended the year with net assets of $5.7m, an increase of $3.5m over the course of the year, according to its filing.

Baker wrote in her blog that saving some of the Foundation's revenue is essential to ensure it is able to remain independent.

"We've got a 'reserve fund' now which I view as extremely important. Having savings means that people are much more likely to believe us when we say we will turn down revenue if it doesn't benefit the user. We've always said this, and we've meant it," she said.

She added that in the near future Mozilla will be looking at how it can disperse funds within its open source community.

"I've been told by some people that this is risky and that the thought of money distorts the community," she said. "But we do have money in the project now and some of it should get spent on a project-wide basis unrelated to employment. I'm hoping we can do this in a way that reflects our community organization and distributed authority. I'm not sure what the mechanism is yet but I know it needs to happen."

Mozilla's 990 Form is available free of charge on sites such as GuideStar.org.

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