
Mozilla’s reliance on Google is increasing: 90% of 2012 revenue - hackhackhack
http://thenextweb.com/insider/2013/11/21/mozillas-reliance-google-increasing-90-2012-revenue-came-one-source/
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saosebastiao
I'm so sick of this argument about Mozilla. It is like saying a Principal
Engineer at Microsoft relies on Microsof because it provides 90% of his
income. Last time Mozilla's contract was up for negotiation, they caused
_bidding war_ that increased their value over the previous contract...it
wasn't Google's generosity. You are a fool if you think Mozilla is beholden to
Google.

~~~
shooper
I think a better argument is that Mozilla needs to diversify its revenue
sources. Chrome is taking away marketshare from Firefox thanks to advertising
and paying a lot to be bundled with Java, Flash, Acrobat etc. updates or just
being shipped as default by the PC OEMs. It makes sense for Google because
then they needn't pay out so much to Mozilla. For many non tech folks where I
had replaced IE with Firefox, I now see them using Chrome, and when I asked if
they installed it, they usually have no idea how it got on their computer.
This is a real danger that Firefox and Mozilla face.

Not sure what's the state now but a few years ago the CEO was being paid
~400K/yr to run Mozilla Corp. For that kind of money, one would expect that
Mozilla would have more diverse revenue than being a one-trick pony.

~~~
judk
On a purely market basis, 400k buys talent comparable to a senior manager /
director of the Chrome or Safari team of ~100 people, not a VP or CEO of a
company with $100m annual revenue.

$400k is what one-trick ponies like doctors and lawyers and traditional
industry local small business owners earn.

~~~
dingaling
> $400k is what one-trick ponies like doctors and lawyers and traditional
> industry local small business owners earn.

Or a little under twice that of the Prime Minister of the United Kingdom (
pop. 60 million ), when summing his MP and Government jobs.

 _The combined ministerial and parliamentary salary of the Prime Minister is
£142,500 at April 2013_

I'm fairly confident in saying that David Cameron puts in considerably more
effort than the CEO of Mozilla. I really don't see how anyone can justify
$400k for such a job.

~~~
TheCoelacanth
No one goes into a political office because they want the salary. Any one who
can get there is usually already rich enough that the salary doesn't make much
difference. If you consider the amount of money they spend campaigning, they
effectively end up paying to have the job. They take the job because of the
power that comes with the job, not because of the salary.

------
jstalin
Mozilla looks like they're hedging their bets. Looking at the balance sheet
shows that they are sitting on $240 million in cash at the end of 2012, up
from $170 million in 2011. They could weather a couple of years with no Google
revenue.

[https://static.mozilla.com/moco/en-
US/pdf/Mozilla_Audited_Fi...](https://static.mozilla.com/moco/en-
US/pdf/Mozilla_Audited_Financials_2012.pdf)

------
kibwen
Mozilla acknowledges this as such in their annual financial reports (and has
for a while now):

 _" Concentrations of Risk: Mozilla entered into a contract with a search
engine provider for royalties which expires November 2014. The previous
contract term expired in November 2011. Approximately 90% and 85% of royalty
revenue for 2012 and 2011, respectively, was derived from this contract. The
receivable from this search engine provider represented 69% and 77% of the
December 31, 2012 and 2011 outstanding receivables, respectively."_

I wouldn't worry too much about it. The fact that Google was forced to up its
bid during the last round of contract negotiations means that Mozilla's value
to Google has only increased, despite Chrome's presence on the browser scene.

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themodelplumber
One of the key "all is well" arguments here seems to be that Google could lose
a significant chunk of search/ad market share by losing Firefox to Bing.

Are there any "danger, danger" arguments that directly address the amount
Google spends on Firefox _in relation to_ the market share it gains in return?
This TNW article seems keen to point out that Firefox is wearing a shiny pair
of handcuffs, but conveniently leaves out the other half of the equation.

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ebbv
If I were at Mozilla my #1 priority would be fixing this situation. Google has
been less and less "not evil" lately, and this is not a position that I'd feel
comfortable in long term.

Alternative revenue models are needed. Unfortunately, reducing costs is
probably also necessary.

~~~
untog
_Alternative revenue models are needed._

Their current revenue model isn't "Google", it's "the search box on Firefox".
Now, you can debate whether it is sensible to rely on the search box, but it
isn't tied to Google. Microsoft or Yahoo would probably love to get there
instead.

~~~
johansch
But would Firefox users tolerate that?

------
27182818284
This feels like mud raking a controversy. I can't think of a situation where
Google seriously Twisted Mozilla's arm using their financial backing as
muscle.

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abhididdigi
I am surprised by this. Mozilla is literally pumping out good open source
software and no other company except Google is backing them?

~~~
untog
Two points:

Mozilla is pumping out mostly _user facing_ open source software, which will
probably attract less money than, say, Red Hat.

Also, it's not that no company except Google is backing them. It's that they
get a huge amount of money from their search box - currently paid by Google.
Microsoft might well be happy to become the default and pay just as much.

~~~
huxley
Microsoft wasn't interested in paying anything near that much, nor was Yahoo,
that's why talks collapsed during the negotiations.

Google does consider the search engine placement valuable but it is probably
also funding Mozilla as a hedge against anti-trust lawsuits.

~~~
takluyver
Also, with Yahoo's search results now coming from Bing, this does mean that
the biggest potential sources of funding are all linked to companies who
compete directly with Mozilla's biggest product - Google and Microsoft have
their own browsers. It's certainly not an ideal position for Mozilla.

~~~
jeffasinger
There are other search engines that may be interested in something like this.
While strange bedfellows for geopolitical reasons, I could see Yandex or Baidu
doing a default search deal in order to break into the English speaking market
a little more.

------
manishsharan
what other options exist for funding this organization ?

If I were to brainstorm, I would recommend that Mozilla folks start go after
enterprise market; almost every bank I have consulted for uses awful and
poorly made GUI application using Swing or C# and most are struggling with
Mobile. Since Mozilla is crossplatform and secure , I do think there is
opportunity to offer training and support for customizing and hardening
Firefox for enterprise business applications.

~~~
kevingadd
Going after the enterprise market wouldn't earn Mozilla any tangible amount of
revenue.

~~~
manishsharan
I do not understand your remark : enterprise market is traditionally viewed as
very lucrative.

RedHat, Jboss , SpringFramework folks are doing remarkably well in the
enterprise market though they had roots in free and opensource software
movement.

~~~
wmf
Browsers are a unique market. IE is free and most enterprises would prefer to
use it anyway. Mozilla would have to pay most enterprises to switch to
Firefox.

------
hojoff79
The sentiment below is correct, there should not be a real concern here for
Mozilla. Here's how you should think about it from a business perspective.
Most (but not all) companies should be concerned about their bargaining power
with customers when revenue is highly concentrated. This concern comes from
the fact that customers can threaten to leave, which will significantly
decrease revenue and be difficult to replace. Consequently, many companies
will lower prices under the logic that retaining 90% of that revenue is better
than the results from trying to replace it with smaller revenue opportunities.

However, this is far from the case for Mozilla. Google pays Mozilla in order
to be the DEFAULT search engine (which is valuable on the theory of consumer
inertia). The default position is a limited commodity; there is only one
default position and, therefore, by doing business with Google they are
passing on other business. If Google left then Mozilla would be able to sell
that default position to someone else (probably Yahoo or Microsoft) and would
be able to replace most of that revenue with comparable revenue very quickly.

I would argue Google is in the more difficult position here. Google has a some
(not a lot) concentration of their acquired traffic from Mozilla (I think
~10%), and that is not a limited commodity. If there were other comparable
traffic acquisition opportunities available, Google would pursue them. Google
is not necessarily passing on other business because of their business with
Mozilla (while, as explained above, Mozilla is passing on other business
because of their Google deal). So presumably if Mozilla and Google part ways,
that Google business (revenue, profit etc.) would be lost (at least for now)
and take some time / effort to replace. While Mozilla’s power over Google is
definitely small, I would say with certainty Mozilla should not be concerned
about their Google concentration in this scenario.

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zimbatm
Where is the evidence that the revenue is coming from Google ? If you look at
the actual report[1], Google is never mentioned. From that all we can conclude
is that Mozilla has made more revenue on Royalties.

Mozilla has diversified it's income stream with FirefoxOS and it's entry into
the mobile market. Couldn't some of the royalties come from Telephonica and
other mobile operators ?

[1]: [https://static.mozilla.com/moco/en-
US/pdf/Mozilla_Audited_Fi...](https://static.mozilla.com/moco/en-
US/pdf/Mozilla_Audited_Financials_2012.pdf)

~~~
jlgaddis
_" Concentrations of Risk: Mozilla entered into a contract with a search
engine provider for royalties which expires November 2014. The previous
contract term expired in November 2011. Approximately 90% and 85% of royalty
revenue for 2012 and 2011, respectively, was derived from this contract. The
receivable from this search engine provider represented 69% and 77% of the
December 31, 2012 and 2011 outstanding receivables, respectively."_

------
pearjuice
This isn't about Google playing the good guy. Their core business heavily
relies on big, personalized data. By giving all that money to Mozilla, they
claim the default search engine and probably some other man-in-the-middle
services too (like Google error pages or Google anti-malware protection). I
haven't used Firefox for a while, but I guess that also includes auto
completion in the navigation bar like Chromium.

It is only logical for them to invest in spots they can gain this data from.

------
mrweasel
Building a browser is pretty complex, but on the other hand, the OpenBSD
developers are building an operating system without funding from anyone but
their users.

I wonder if Mozilla could survive solely on funds from their users or if it's
two different worlds.

~~~
owenmarshall
It's important to remember that the Mozilla Foundation does more than just
Firefox -- Thunderbird, Firefox OS, Mozilla Labs, Mozilla Research, etc. all
get a slice of the pie.

So while Firefox would likely survive, it'd imagine it would look much more
like the post-Netscape, pre-MFL years. No more work on stuff like Rust, Servo,
asm.js, things like Thunderbird would atrophy...

That said, I'm not sold on Mozilla needing Google; I'm sure they could swing a
deal with Bing. What strange bedfellows that'd make.

~~~
taopao
I would like to think they'd annihilate each other like antimatter and
antimatter. Microsoft tried to smother OSS on many occasions, both directly,
through FUD, and by proxy (SCO). Embrace extend extinguish. Steamrolling
Windows-only solutions over standards. They just killed patent reform efforts.

It just seems like they embody the opposite of Mozilla organization's ideals.

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tvanantwerp
A lot of folks here are suggesting that Google's status as a primary source of
revenue for Mozilla does NOT leave Mozilla beholden to Google's wishes.
Without arguing if this is true or not, I'd like to ask a follow-up: are
nonprofit/political organizations that receive substantial support from the
Koch brothers also NOT beholden to the Koch brothers? Why or why not?

------
k__
How come that no other company wants to pay Mozilla?

There are many out there who use their products on a daily basis.

~~~
Touche
I bet they get solicited all the time but there aren't many ways to make money
on a web browser without ruining the user experience.

~~~
rayiner
You could just sell a copy, but hey I guess I'm old fashioned thinking selling
a product in exchange for money is better than selling eyeballs to
advertisers.

~~~
Touche
You are old fashioned, even commercial browsers abandoned that strategy years
ago.

~~~
mjn
Out of curiosity, has anyone tried that strategy with any success post-Opera?
They're the last I remember to sell significant numbers of copies of a
browser. Depending on how you count, that ended in either 2000 (when they
introduced a free ad-supported version, though you could still pay for a
registered, ad-free version), or 2005 (when the paid version was phased out
entirely).

~~~
iSnow
I guess iCab is the last one still trying (as shareware):
[http://icab.de/](http://icab.de/)

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guiomie
Whats with the huge loss in forex ?

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wnevets
You mean like how iOS was reliant on google for its default search?

~~~
anon1385
Are you really seriously suggesting that income from iOS search was remotely
significant to Apple's bottom line?

~~~
sp332
wnevets' comment didn't mention money.

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Zigurd
To declare a crisis before Mozilla properly launches their mobile OS is
premature.

