Mozilla, the organization behind the popular Firefox web browser, has extended its search deal with Google for another three years. In return for setting Google as the default search engine on Firefox, Google pays Mozilla a substantial sum - in 2006 the total amounted to around $57 million, or 85% of the company’s total revenue. The deal was originally going to expire in 2006, but was later extended to 2008 and will now run through 2011.
The deal will ensure that the Mozilla foundation will be able to continue with the development of Firefox, its mail client Thunderbird, and a number of other applications. From Mozilla CEO John Lilly:
“We’re very, very happy about our relationship with Google and this makes sure that Mozilla will be sustainable and thrive for quite a long time to come”.
Mozilla uses the funds to pay staff, support its bandwidth and hardware infrastructure, and to distribute a number of grants. Because the search giant accounts for 85% of its revenues, Mozilla has become almost totally reliant on Google, something that has apparently concerned a number of members in the open source community. But Mozilla maintains that the two organizations operate independently. From its 2006 Financial FAQ:
“We develop our product and technical direction as part of an open process unrelated to the search relationship with Google. We talk to Google about the parts of the product that offer Google services (i.e., the Firefox Start Page) and the services they provide, like anti-phishing. Otherwise Google does not have any special relationship to Mozilla project activities.”
The Mozilla Foundation is a non-profit organization that owns two taxable companies that earmark all profits for the Foundation’s open source projects. You can see the original announcement at Mozilla Chairperson Mitchell Baker’s blog.
See all
Post
85% of total revenue is great, but can’t google launch their own browser or directly buy firefox instead of sharing their revenues?
what is the difference between this arrangement and the ’switftboat veterans for truth’?
One is a legitimate business partnership, the other a devious campaign of lies and character assassination that skirted the very edge of campaign finance law.
The fun connection? Google.org loves alternative energy, as does T. Boone Pickens, who helped fund the swifties in 04.
if google makes a browser and ships it with google search as default, its not cool. similar to bush bashing kerry directly.
however, if you fund firefox, and have it ship with google as default, it’s totally cool, similar to bush backers funding the ’switftboat veterans for truth’.
quite simply, outsource the dirty work. and yeah, looking at the contribution of google’s business to mozilla, you can safely say google does fund mozilla.
Feed Them- Grow Them - Acquire Them!
.. Is this something Google is thinking about?
You need to re-think over your thoughts coz the thing is Mozilla made it Big by itself.It’s Google which is pocketing BIG bucks through Mozilla.I think,this is more of a generous payback to the NGO.
And yes,acquiring Mozilla won’t really happen as Mozilla is an NGO & wouldn’t sell itself for money.
If that would have been into Google’s mind,they would have probably acquired Wikipedia already.But that’s not the case.(Wikipedia fetches millions & millions of pageviews every day,means compromises millions of $ just bcoz they are an NGO)
Got it !
Every company has its own expertise.I agree,Google is ubiquitous on internet but still,it will take years of hard efforts for Google to build a path breaking browser which would perform better than Mozilla and every other browser.So better stick with Mozilla.
Acquisition can’t happen coz it’s an NGO.
What does Mozilla do with all that cash money if they’re non-profit??
Hey Tyler,i think,if you get a chance to get to work for Mozilla,you should never go for it coz Mozilla employees work for FREE,isn’t it ?(lol).Also,Mozilla’s servers are homemade so again FREE(lol again)
Wow that really helpd. Thanks
Tyler, you asked, “What does Mozilla do with all that cash money if they’re non-profit??”
The answer is right there in Jason’s article. “Mozilla uses the funds to pay staff, support its bandwidth and hardware infrastructure, and to distribute a number of grants.”
The only thing I’d add is “and saves/invests the remainder.”
- A
“We’re very, very happy about our relationship with Google and this makes sure that Mozilla will be sustainable and thrive for quite a long time to come”.
Hmm, that is hard to imagine, especially at around $57 million annual revenue.
I wonder why Google didn’t come up with their own browser. They are more than capable of creating one. They should seriously consider having one since Microsoft is playing dirty at the moment.
What would be the benefit worth creating their own browser? There isn’t any demand for a new browser, and Google’s already built into the search boxes of them all.
SO funny to read all of these comments after knowing about Google Chrome…
RIP Mozilla Foundation…
“The deal will ensure that the non-profit Mozilla foundation will be able to continue with the development of Firefox, its mail client Thunderbird, and a number of other applications.”
http://en.wikipedia.org/wiki/Mozilla_Corporation
“The Mozilla Corporation (abbreviated MoCo) is a wholly-owned subsidiary of the Mozilla Foundation that coordinates and integrates the development of Internet-related applications such as the Mozilla Firefox web browser and the Mozilla Thunderbird email client ”
Sombody is really behind the times. Mozilla Firefox is a for profit corporation now. This happened at least 2 years ago.
“In March 2006, Weblogs, Inc. founder Jason Calacanis reported a rumor on his blog that Mozilla Corporation gained $72M during the previous year, mainly thanks to the Google search box in the Firefox browser.[5] The rumor was later addressed by Christopher Blizzard, a member of the Mozilla board, who wrote on his blog that “it’s not correct, though not off by an order of magnitude”.[6]“
Yeah, they’re technically a corporation, but not in the sense you’re implying:
“Any profits made by the Mozilla Corporation will be invested back into the Mozilla project. There will be no shareholders, no stock options will be issued and no dividends will be paid. The Mozilla Corporation will not be floating on the stock market and it will be impossible for any company to take over or buy a stake in the subsidiary.”
I’ll edit the post for clarity though.
insider trading. they should merge with the vatican.
Jason, sorry, I missed this comment before I replied to you. You’re absolutely correct and though I missed the text before the clarification, you pretty much hit the nail on the head. Mozilla isn’t a traditional organization in any way shape or form
- A
I’m a big fan of Mozilla, but one of the reasons they formed MoCo was so they wouldn’t have to disclose how much they’re making off Google. With their market share almost doubling since the last reported numbers, they’re *easily* north of $100M annual revenue by now, probably pushing $200M. And that’s only going to accelerate now that they’re pushing default browser sets in the Firefox 3 installer and just launched their autoupdate from FF2 to FF3 this week.
If I were them I’d be looking for deals with Yahoo, MSN, and Ask just to diversify their revenue stream a bit.
“I’m a big fan of Mozilla, but one of the reasons they formed MoCo was so they wouldn’t have to disclose how much they’re making off Google.”
Mozilla has disclosed the exact sum and source of all income every year with it’s tax filing. I’m not sure where you got that wrong idea. Had you actually read the post you’re responding to and followed any of the links, you’d have seen that.
- A
Oops, didn’t finish my reply.
“If I were them I’d be looking for deals with Yahoo, MSN, and Ask just to diversify their revenue stream a bit.”
Some revenue diversity is obviously good but the priority here is not revenue but the right features for our users. Are you suggesting that Mozilla provide its users with a less good search experience in order to diversify or maximize revenue? That’s not gonna happen.
If you’re suggesting juts more deals, those are and have been in place for years. Google is the primary and default search in Firefox (because we believe it’s the best experience for our users) and so it’s used by a lot more people than the other included search services but Mozilla does include other search services and has financial relationships with other search providers.
- A
What about if they share some of the money width the extensions developers?
without extensions no way FF will have the actual market share….
You mean by doing something like this? :
http://labs.mozilla.com/contes.....etails.php
$57 million. The price Google pays to be the default search engine in Firefox.
At what point does this cease to be a good deal for Google? Right now, I think they’re happy to pay $50-100M a year to keep the pressure on Microsoft to move the browser forward as a platform. But at some point, especially as Mozilla continues to gain market share and browsers pass a certain capability threshold, Google may feel differently about this arrangement. Even if Firefox were to switch its default search engine to Yahoo or Live, I think a very large percentage of users would quickly switch back to Google. Look at the situation with IE. Even though it has more browser market share than Firefox and it defaults to Live search, this hasn’t translated to a sustained gain in search market share for Live. As Google’s revenue/profit growth slows down, the pressures of having to make their numbers is going to cause them to take a very hard look at all the traffic acquisition payouts, especially those that end in 6 or more zeros. I hope the Mozilla corp. is tucking away a good chunk of that money and planning ahead for the day this search referral gravy train comes to its last stop.
You can see exactly how much revenue Mozilla is generating, spending, and saving in each of the annual tax reports that Mozilla makes available by its website.
Actually, it’s almost certainly a better deal for Google now. Originally, Google was probably supporting Mozilla at least partly because it wanted to ensure competition for Microsoft in the browser market (and a competitor that would support open standards). Now that Firefox has a much larger market share, Google’s money results in a lot more Google searches. Yes, many people would use Google anyway, but it certainly not all Firefox users would. And making a search engine easily accessible in the browser leads to more use of search overall. Google has many deals to be the default search provider with pc manufacturers and cell phone operators; this can now be considered just another one of those.
Google is only paying a percentage of the per-click fees they’re charging advertisers for searches made through the browser. There’s no reason for Google to ever cancel the deal entirely.
I would’ve thought the figure would be way higher than $57m, considering they have 14% of the browser market, and a much larger percentage of the technical market, who spend an aweful lot of time searching.
“I would’ve thought the figure would be way higher than $57m, considering they have 14% of the browser market”
Most estimates put that number closer to 20% of global browser usage.
But yes, it’s pretty obvious to anyone looking at it even a little bit that Mozilla isn’t trying to maximize revenue here at all. That’s a good thing. While financial sustainability is obviously critical to any group that wants to be around long enough to have an impact, making the Web better takes a lot more (and different) than just money.
- A
Jason, you wrote “The Mozilla Foundation is a non-profit organization that owns two for-profit companies that earmark all profits for the Foundation’s open source projects.”
I think you’re making a great point here by recognizing and explaining to your readers that the Mozilla Corporation serves the Mozilla Foundation public-benefit mission.
But, I think a more accurate description than “for-profit” is “taxable” since that’s the real distinction between the legal status of the Foundation and the Corporation.
Mozilla Corporation is not a traditional “for-profit”. It operates as a public-benefit organization that, in fulfillment of it’s (shared with the Mozilla Foundation) public-benefit mission, generates revenues that might not fit the IRS’s requirements for a Charity. Calling it a “for-profit” suggests to a casual reading, incorrectly, that “profit” is a goal — which just isn’t the case.
The only meaningful distinction between the organizations is that revenues the Foundation generates through its activities are not taxed while revenues that the Corporation generates through its activities are taxed. The motivation and the operation of both entities is to benefit the world by creating public goods.
That’s not “for-profit” as most people understand “for-profit.”
- A
Good point, I was worried that people might wind up getting the wrong impression. I’ve changed it to “taxable”.
I guess everyone included in their standard search doc (eBay.com, Amazon.com) and bookmarks pays their share to be included, just look at the referring tracking codes which are part of the URLs once you land on their website. But never mind - at least Firefox gets even better with each release. Can’t wait for version 4.0
Can you tell me how much Google AdSense contributes for the total downloads of Firefox
I am asking this because, soon Google AdSense will shut off referral ads means no more Firefox download…
How will this affect the market share of Firefox..??
I need these information for a post on my blog.
Rupesh, Google’s Firefox referral program through AdSense has not been a significant contributor to Firefox’s growing market share.
As an explanation of part of why that’s true, I can tell you that in the last month alone (not counting updates) Firefox 3 has averaged about a million downloads a day from the Mozilla websites.
No other source of Firefox downloads come close to that. It’s organic, word of mouth driven downloading that’s put Firefox where it is today.
- A
Geez, I appreciate mozilla a heluva lot and agree with most of what you’ve written, but you’re like a bull dog on this post. Let it rest, no offense.
Asa is a long term employee of the Mozilla Foundation/Corporation. He is doing his job, he is providing insight as opposed to speculation. The Google contract is one of the most misunderstood facets of Mozilla.
Yet, Google’s adsense team abandons paying $1 per firefox install… having everyone switch over to pushing Yahoo items. Good job.
Didn’t read all the comments, regardless of it not being a significant user source, it is a very cheap way for Google to get even more users, why abandon a income source if you don’t have to?
So I’m a user of firefox. I download it and I open it up for the first time. I go to the default firefox page with the google search bar. I use the search and firefox is paid. All of this and no one explicitly informed me that I have a choice of what my default page will be, our what my default search engine will be, or what my default, news reader will be. And no one informed me these defaults would be google or that my using them would generate revenue for both google and Mozilla.
I thought that non profits were supposed to be transparent ?
Good on Mozilla! It’s great to see people being rewarded for creating a great product!
I am not concerned about the relationship. Google regularly encourages the growth of open source projects. I doubt they’ll try to use their influence to sway the direction of it. And given that Google is already my preferred search engine, why shouldn’t everyone use it?!
Weird. Google will launch their own open source browser and they still support Mozilla. What are they try to archive?
This seems like a great relationship for the Mozilla group. I’m sure it would not have been a good if this relationship was lost. I just hope that they find other means of of monetizing their products that does not become intrusive or obnoxious.
good news
yes!good news
It’s funny. I am from the UK and most of the people I know haven’t even heard of Mozilla. I on the other hand think that Firefox is the best browser by far. Great news on the Google deal!
Thanks mucx
Now google already launch their own browser. Is the deal still continue?