
Mozilla and Google Sign New Agreement for Default Search in Firefox - dochtman
http://blog.mozilla.com/blog/2011/12/20/mozilla-and-google-sign-new-agreement-for-default-search-in-firefox/
======
gojomo
Some additional data points to help parse this:

• the agreement appears to be with the Mozilla corporation, rather than the
non-profit foundation... but the corporation is 100% owned by the foundation,
so the distinction is mainly for tax/accounting/reporting advantages

• the prior agreement delivered over $80 million in yearly revenue to Mozilla
(as of the last time I recall seeing credible numbers reported, a couple years
ago)

• the prior agreement technically expired 3 weeks ago, so the multi-year
renewal negotiations may have had some wrinkles

I hope Mozilla is now earning even more; with the rise of Chrome and iOS they
may need it.

~~~
yajoe
Admittedly I haven't paid close attention to the Mozilla Foundation even
though I was an early firefox adopter and continue to use it on my macbook
air...

tl;dr -- Google contract worth about 100 million in 2010 given the latest
public numbers, more than 150% of the total engineering budget.

My rambling notes... I wanted to look into this corporation/foundation
distinction to see how much money Mozilla gets from Google. Some highlights
from Mozilla's _2010_ financial report (2011 isn't out):

[http://static.mozilla.com/moco/en-
US/pdf/Mozilla%20Foundatio...](http://static.mozilla.com/moco/en-
US/pdf/Mozilla%20Foundation%20and%20Subsidiaries%202010%20Audited%20Financial%20Statement.pdf)

1) Mozilla doesn't live off our contributions, not by a long shot: Mozilla
only had collected 150k in contributions throughout 2010 and expected at most
1.7 million total (there is a discrepancy in time between when the report is
prepared and when donors may actually send the check they promised).

2) Mozilla received 121 million from "royalty revenue" -- anything related to
the Mozilla brand: Amazon affiliate programs, search engine branding like this
Google deal, and sale of products from the Mozilla shop.

3) According to note 9 (footnotes are always where all juicy info is buried),
84% of the royalty revenue from 2010 is from "a contract with a search engine
provider for royalties which expires November 2011." I take that to mean the
Google contract. 84% of 121 million is ~100 million.

4) Mozilla's burn rate was 62 million, which means Google paid for the entire
Mozilla development effort in 2010. Interestingly Mozilla's burn rate
increased 50% from 2009. I can speculate this is from the increased
competition from Chrome, but who knows.

5) Mozilla held 105 million -- yes million -- in investments in 2010 (mostly
bonds and index funds, check out note 3). Without Google, Mozilla can use this
war chest to operate for at least 2 years. That's much, much better than most
companies.

6) Last, as a side note: there was a re-org in early 2011 (which I had missed)
where Mozilla seems to have folded the thunderbird effort in with the browser
team. This could be a "synergy" move, but it likely means they are divesting
from that business and putting more people on the browser effort.

~~~
ww520
Thanks for the info. Very interesting.

Burn rate of 62M is pretty high. That can fund about 300 people plus other
costs like hosting. Is that only for the browser or for other projects as
well?

~~~
_delirium
Not sure how reliable a source it is, but Wikipedia cites a Mozilla engineer's
tweet as saying they have 600 employees, which is a bigger operation than I
would've guessed:
<https://twitter.com/#!/paulrouget/status/116110841669099520>

~~~
zobzu
they doubled size this year to counter chrome's speed of development

------
dman
Firefox is an amazing piece of software and the fine folks at Mozilla are
always pushing the envelope of online experiences. Am happy that Mozilla folks
can concentrate on the software for the next couple of years without having to
worry about funding.

~~~
jasonlotito
On that note, I'd still worry. Essentially, they have 3 years now to come up
with some other means of funding. I've donated to them before, but I don't
think they can stay afloat with just donations.

~~~
mbrubeck
"Funding" makes it sound like Google is doing this out of charity, or like
Mozilla is a pre-profit startup that needs outside investment. Neither is
true.

Google isn't "funding" Mozilla; it's a customer of Mozilla. Their search
traffic payments aren't charity or venture capital; they are revenue. Search
engines are always willing to pay for large amounts of traffic. Even Opera
reports significant revenue from their desktop browser [1][2], which has an
order of magnitude fewer users than Firefox. This is not the first time the
Google/Mozilla deal has been renewed in the past decade, and I doubt it will
be the last. And there are other search engines who will also continue to pay
for valuable traffic.

(Note that individual donations are still important for the non-profit Mozilla
Foundation, since tax rules limit how Firefox revenue can be used for the
Foundation's other activities. Donations help support Mozilla's other projects
to build the open web like the current projects in education, journalism,
video publishing, and online privacy.)

1: <http://www.opera.com/company/investors/faq/>

2: <http://www.quora.com/How-does-Opera-Software-ASA-make-money>

~~~
jasonlotito
> "Funding" makes it sound like Google is doing this out of charity, or like
> Mozilla is a pre-profit startup that needs outside investment. Neither is
> true.

I didn't even imply that, so don't suggest that I did. It's dishonest, and
rude.

> Google isn't "funding" Mozilla; it's a customer of Mozilla. Their search
> traffic payments aren't charity or venture capital; they are revenue.

Yes. I know this. My concern is this customer accounts for, what, 80% of the
total revenue? Are you telling me that if this deal feel through, Mozilla
wouldn't be impacted? Because that is my concern. From my perspective, despite
having contributed numerous times whenever I could to the Mozilla Foundation,
it concerns me what would happen to Mozilla is Google didn't contribute.

Hell, my most recent donation was helped along precisely _because_ of this
fear.

> And there are other search engines who will also continue to pay for
> valuable traffic.

Bing. I have no doubt, but I don't know that. It's all behind closed doors for
the most part.

You make it sound like Mozilla doesn't need my donations, and doesn't need the
Google deal. Could it do everything it does without donations or Google as a
customer? Could it? If so, great!

I feel like I'm being vilified for being concerned.

~~~
mbrubeck
> I didn't even imply that, so don't suggest that I did. It's dishonest, and
> rude.

I'm very sorry!

I hope I wasn't putting words into your mouth. I was reacting less to your
comment and more to the repeated use of the word "funding" in all sorts of
articles on this topic. I think it both reflects and affects how (some) people
perceive Mozilla. For example, the business press would not say that the
Defense Department is "funding" a contractor like Raytheon, no matter how big
a customer they are.

I'm probably feeling overly defensive after all the articles trying to create
drama by claiming Mozilla was in imminent danger of Google "pulling the plug"
(when actually a deal was still in place, and both parties were actively
negotiating the new one but just couldn't talk about it yet). Within the
Mozilla project, we know our userbase is still growing, and the market for
search traffic is as strong as ever. But outside, friends are still asking me
about these baseless scary stories in the press.

> Bing. I have no doubt, but I don't know that.

Yes I believe Mozilla earns revenue from Bing, and also several other sites,
including regional search engines in various locales. In some of our localized
builds, Google isn't even the default search engine.

> You make it sound like Mozilla doesn't need my donations, and doesn't need
> the Google deal. Could it do everything it does without donations or Google
> as a customer? Could it? If so, great!

Not at all! As I mentioned, donations are very important to Mozilla --
disproportionately important, because in addition to the financial resources,
they give us individual support that's important to our existence and
activities as a non-profit public service foundation. And income
diversification (your stated goal) can't hurt either.

And you're correct that Mozilla would be impacted hugely if for some reason
Google stopped paying search affiliates. (But of course, Google would be
greatly impacted too, which is one reason I'm not actually worried about this
right now.) I have no doubt that Mozilla _will_ grow other sources of revenue
_if_ it needs to -- but that's a matter of long-term contingency planning. And
no matter what Google does, our own priorities are clear: Make great software
that serves our mission and our hundreds of millions of users. As long as we
do that, we have leverage and we have control of our fate.

Many successful open source projects run on volunteer contributions,
individual donations, sponsorships, and other sources of support. If revenue
did decrease for some reason, Mozilla could continue to exist as a smaller
organization -- even a much smaller one if necessary, like it was when Firefox
was first developed. We wouldn't have the same reach we do today, but we're
already used to competing with companies like Apple, Google, and Microsoft
that have literally hundreds of times more money than us. Mozilla's biggest
strengths have always been in the community and the source code. Steadily-
growing Firefox revenue is a lever that helps amplify those strengths, but
remember that the success of Firefox created the revenue streams, not the
other way around.

I'm glad you're concerned, because these _are_ challenging times for Mozilla
and the open web. We do need all the support we can get. But I hope Mozilla
gets support based on the great things we've done and will do -- not based on
fear that someone else will come along and squash the movement. We will not be
squashed so easily!

~~~
jasonlotito
> I'm very sorry!

I'm sorry as well. I probably overreacted. Mozilla is just one of those
organizations that I respect and worry over. I remember Netscape, and then
Mozilla, and then a little 0.1 browser named Phoenix, and have used every
version.

> I was reacting less to your comment and more to the repeated use of the word
> "funding" in all sorts of articles on this topic.

I do the same far too often. I reply to a specific comment, and instead of
replying to that one comment, I reply to everything that comment reminds me
of. It's not fair. I understand how easy it is to do.

It's all good. =)

> I'm probably feeling overly defensive after all the articles trying to
> create drama by claiming Mozilla was in imminent danger of Google "pulling
> the plug" (when actually a deal was still in place, and both parties were
> actively negotiating the new one but just couldn't talk about it yet).
> Within the Mozilla project, we know our userbase is still growing, and the
> market for search traffic is as strong as ever. But outside, friends are
> still asking me about these baseless scary stories in the press.

Didn't know you were apart of Mozilla. Should have checked your bio. Btw,

I LOVE YOU GUYS! =)

Anyways, to your point: outside, baseless scary stories or not, it's all we
had to go on. Just think about it for a second from our point of view: Google
has Chrome, the #1 browser by some accounts, and it's paying Mozilla for
searches. And then their deal with Google ends. And nothing is really said
from either party. I get emails from Mozilla asking for donations after this
happens. Press reports talk about the how much Google as a customer means to
Mozilla's bottom line.

So... I get nervous.

> Not at all! As I mentioned, donations are very important to Mozilla

Oh, I realize this. I only wish there was some way I could contribute more
regularly. As it stands now, I have to be reminded to contribute. Might it
make more sense to help automate that process for those interested? Reddit
took the plunge with Gold Accounts, and that seemed to have helped. You don't
even need to do anything. Just something that lets me say "Yeah, I'll
contribute $X per month, because I love what you do, but fairly forgetful and
will sometimes miss the 'Donation' emails."

> Mozilla could continue to exist as a smaller organization -- even a much
> smaller one if necessary, like it was when Firefox was first developed.

I don't want to see that though. You guys do too much awesome. Besides the EFF
and FSF, there is Mozilla. And with you in the ring fighting the fights you
fight, I know that someone is looking out for me.

> we're already used to competing with companies like Apple, Google, and
> Microsoft that have literally hundreds of times more money than us

True, but I'm not. And I see these big 800lb gorillas and remember the days of
IE6 dominance and the end of the browser wars. I remember vendor lock in.

> But I hope Mozilla gets support based on the great things we've done and
> will do -- not based on fear that someone else will come along and squash
> the movement.

That's a fair point. And a good one.

I'll leave it at that, before I start gushing completely as a fanboy.

------
cookiecaper
Mozilla has got to find an alternate revenue stream. Maybe it can start
charging for Firefox Sync space or something like that. Maybe it can take a
cut of donations from Mozilla Addons or sell more prominent spots there. The
fact of the matter is that it is immensely irresponsible to depend almost
entirely on Google for operations. Google could pull an Enron and be gone
tomorrow, Google's founders could die or resign and the company could fall to
MBAs who don't understand the logic behind paying $100 million/yr to a
competing web browser, and so forth. There has to be more money involved here
if Mozilla expects to have longevity.

Really this is true of open-source software as a whole. There really needs to
be a better way to monetize than begging for donations and/or selling T-shirts
if these projects are going to live on. As times continue to turn tenuous,
this will only become more crucial.

I fully believe in OSS and Mozilla specifically, but the reality is that we
_have_ to find a way for OSS to be at least somewhat profitable without
relying on the goodwill of a handful (or less) of benevolent entities.

~~~
systemizer
Do you really think Google could vanish? Google search has become such a
necessity in internet culture today, and culture is very hard to change.

Hell... "google" is a verb in the dictionary: <http://www.merriam-
webster.com/dictionary/google>

~~~
cookiecaper
It doesn't have to vanish to get taken over by executives that don't see the
value in providing such a huge chunk of money to a company that offers a
competing product. In fact, I reckon that most business schools teach this
kind of support for your competitor is extremely bad. We know that brilliant
and awesome companies end up in the hands of MBAs and it's all downhill from
there. Mozilla should certainly plan for this eventuality.

~~~
jlongster
You're way oversimplifying it. Google gets a huge influx of traffic through
this deal, and Mozilla would most likely be able to generate income from their
30% of the browser space if Google didn't sign this (possibly even from Bing,
which is even worse for them). That kind of market space itself is a valuable
asset, and is why Google is willing to go through this.

------
kibwen
I love Firefox (and Chrome! no need to be zealots :D ), but I'm even happier
that this means there will be no interruption to the full-time development of
Mozilla's new systems programming language, Rust:

<http://www.rust-lang.org/> <https://github.com/graydon/rust>

Coincidentally, for those who like to make much ado about Mozilla vs. Google,
Rust has a lot of similarities to Go. (As both projects began as semi-secret,
low-key affairs, this is due more to convergent evolution than anything.)

------
zach
Is there any way to monetize legitimate software search traffic to a decent
search engine without cutting a special deal like this?

I have an app-launcher-like project I'm working on that could benefit from
this kind of arrangement, but browser toolbar scammers seem to have scorched
the earth.

Anyway, great to see this deal continue. This is a great partnership that I
presume both sides would like to keep going, but the details still have to
work out right.

Sort of like Pixar and Disney in the 90's. Then again, Disney didn't figure
out how to make Pixar-quality movies back then, yet Google has definitely
figured out how to make a world-class browser.

~~~
there
i'm pretty sure google's custom search provides income from ads clicked
through it.

<https://www.google.com/cse/>

~~~
zach
Google is totally a no on this count. Their generally-available programs are
all for people entering search terms into Google's own widgets and
specifically exclude software sources. I asked around at I/O and the answer
was basically a shrug and suggestion to "get big and call biz dev".

I fully understand why, of course — they have lots of tools and expertise for
verifying the authenticity of web-based queries, but software has to monitored
in a different and likely less scalable (maybe even human-driven?) way.

And Google hardly needs to pursue desktop apps' small (and, to be fair,
traditionally risky) traffic source, so in turn they haven't developed the
technology to make that scale better.

I still love Google search though, so I wish I could use them. Instead I have
to choose between monetizing what is clearly very valuable search traffic and
giving users a search experience I think is outstanding. It's really
frustrating.

If anyone has any ideas how I can cut this Gordian knot, feel free to get in
touch via my profile info.

------
ge0rg
> The specific terms of this commercial agreement are subject to traditional
> confidentiality requirements, and we’re not at liberty to disclose them.

This sentence lets one think about the importance of openness in the Open
Source community. I wonder if the community would accept the same clause if
Microsoft/Bing were to provide the next three years of Firefox searching.

~~~
nknight
> I wonder if the community would accept the same clause if Microsoft/Bing
> were to provide the next three years of Firefox searching.

Money is money. Absent some evidence of a conflict on the part of people at
Mozilla, I would have no objection to that clause from MS/Bing. I would object
to the deal as a whole on other grounds, though.

~~~
gcp
_I would object to the deal as a whole on other grounds, though._

May I ask why?

Mozilla was testing having Bing search defaulted in their Test Pilot project.
So I suspect such a deal may have been very close.

(I think Microsoft actually offers such a Firefox from their site)

~~~
nknight
Because in my opinion, assisting Microsoft's acquisition of marketshare in any
market is ultimately detrimental to everyone. They are a societal and economic
evil, and directly aiding them is highly unethical.

~~~
zobzu
Yeah, so how that's fundamentally different of any other company? Do you
really think that if Chrome would get 90% of the market share the web would be
a better place?

It'll be just as closed. It would still have some remains of open source, but
the technologies wouldn't work with anything non-Google.

Which essentially is the same thing.

Heh, Mozilla should start MozillaSearch :P

~~~
nknight
It is my opinion that, based on their conduct past and present, Microsoft's
existence and power is a net loss for the world. Google's past and present
conduct lead me to the opposite conclusion. Naturally, I will treat these two
entities differently.

Hypothetical future scenarios based on some rather extreme assumptions I do
not agree with are not going to change that.

You are, of course, free to reach different conclusions, but the level of
hostility and condescension I've received here for voicing my opinion in
response to a direct question is disturbing to say the least.

------
fletchowns
I've been using about:blank as my home page for awhile, does Google ever
advertise Chrome on the default Google/Mozilla homepage?

~~~
gkoberger
I'm a Mozilla web developer. Mozilla controls the homepage now, and all
"snippets" on the about:home page are for Mozilla-related projects or things
we believe in.

So, no.

------
JoshTriplett
Mozilla's placement of Google as the default search engine in Firefox makes a
huge difference in Google's continued position as the default search engine
people turn to. Google at this point doesn't provide profoundly better search
than anyone else; several other search engines exist which have results more
or less as good as Google's, or possibly even epsilon better. Google has three
things going for their search engine: the inertia of people using what they've
gotten used to as long as it remains "good enough", the pile of other services
Google offers that integrate very well with each other, and Google's position
as the default search engine in most browsers.

~~~
zhwang
I think it's more of Google practically being ingrained into people's heads as
_the_ way to get somewhere on the net. Time and time again I've seen people
with MSN or Bing as their homepage, and they'll just search for "google".

~~~
JoshTriplett
I can't argue with that. But its placement as the default search engine goes a
long way towards ingraining it into people's heads.

------
ecaradec
At some point it should make sense for Mozilla to support Bing : Mozilla is
here to bring a better internet, and there can only be a better internet with
competition. MS is losing tons of money for operating Bing ; there is a risk
that they decide to stop losses. If Bing was shut down Google would be the
only lasting real player in the search space, and that would not bring a
better internet. My 2c ;)

------
prodikl
With Mozilla's downward slope in browser share, it seems smart to keep the
relationship going for both of them. If Mozilla keeps losing ground to Chrome,
Google wins. If Mozilla grows its userbase somehow, Google wins. Not to
mention Mozilla keeps getting paid for what they do.

------
mrich
Would be interesting to see how much Google spends on Chrome development each
year. I suppose it is much less than the estimated 100 million they pay
Mozilla, so this alone would have been reason enough to create their own
browser.

~~~
FrankBooth
There is no way it is less than $100m. The Chrome team is at least the same
size as the Firefox team, if not significantly larger. Google probably spent a
good chunk of $100m on advertising Chrome; television spots and subway posters
don't come cheap.

~~~
azakai
> There is no way it is less than $100m. The Chrome team is at least the same
> size as the Firefox team, if not significantly larger.

I would guess significantly larger. And Apple's WebKit engineer's efforts are
also of value, making it effectively even larger.

> Google probably spent a good chunk of $100m on advertising Chrome;
> television spots and subway posters don't come cheap.

It's much more than that. Chrome is advertised pretty much everywhere online,
and it has deals with lots of shareware software, where Chrome is installed
along with for example Adobe Acrobat. The cost of all of these user
acquisition strategies has to be way more than $100M.

------
sirwanqutbi
Well that would be Mozilla's retirement fund..

------
ExpiredLink
I guess the "mutually beneficial revenue agreement with Google" contains
Mozilla's agreement to support Dart.

~~~
potch
The open governance of the Mozilla project is not subject to the sort of back-
room dealings you imply.

(Disclosure: I work for Mozilla, but have no knowledge of the inner-workings
of the new deal.)

