Previously they were getting $300M a year from Google and they were required to spend that every year, from what I've been told from employees that I know. Everything I've heard from them is that Mozilla is a very wasteful company. They spend a bunch of money on things like boondoggles to Europe for the staff, apartments in Paris that anyone can book, employees sitting around with almost no work to do, etc. They also have really lucrative bonuses (>40%/yr) for employees that push salaries over $200k for senior engineers, so I'm just wondering why they even bother with donations? I'm assuming that their contract with Yahoo is even more lucrative than $300M/year, so they must have a lot of money to spend, why worry about donations that might only reach a small percentage of that?
Major points: donations are used for projects working on things like web literacy, rather than on large engineering projects like Firefox. The more Mozilla get from donations, the less dependent on Google/Yahoo they have to be and thus they can be more independent - even fairly small absolute amounts will 'push the needle' here.
Minor point: I strongly contest that Mozilla is a wasteful company - salaries are low by large-tech-firm standards and spending (on travel, equipment, etc.) is fairly frugal. I have never heard of employees having almost work to do - it is nearly always the opposite. Travel is nearly always for coordinated team work since many employees and volunteers work remotely. For a (relatively) small budget, Mozilla produce an awful lot of results - the entire company is run on vastly less than the marketing budget (!) for Chrome, for example (sorry, can't find a source though).
The "marketing budget for Chrome" is something thrown around internally at Mozilla, but that number was pulled out of calculations on how much it would cost somebody else to advertise Chrome that google does on its own properties. Google does not have to charge itself to advertise itself.
In theory; in practice most of the places where Chrome is advertised they wouldn't advertise a third-party product. (Like on the Google search engine homepage, for instance.) That said, I suppose they could be advertising a different internal product there, so there's certainly an opportunity cost regardless.
<disclaimer>I'm a Moco employee</disclaimer>
I don't know who told you that Mozilla was required to spend all $300M each year, but looking at the financial from past years will show you that it's not that clear (https://www.mozilla.org/en-US/foundation/annualreport/2013/)
The apartment in Paris is actually a way to spend less compared to sending people that visit the Paris office to hotels.
Bonuses are not >40%/yr, this is the absolute maximum, and it has never been 40% per year in the last 4 years. It's true that compensation at Mozilla is good, but you need that to be competitive on the job market.
Donations are important for the Mozilla Foundation to keep a non-profit status. The Yahoo! deal is a Mozilla Corporation deal, so that's a different story (Mo Corp pay taxes like any company).
Yep, they have already went through one IRS audit because too much of their income was concentrated on too few sources (makes it look like a front set up by those sources for tax purposes). See https://en.wikipedia.org/wiki/Mozilla_Corporation#IRS_audit for example.
Previously they were getting $300M a year from Google and they were required to spend that every year, from what I've been told from employees that I know. Everything I've heard from them is that Mozilla is a very wasteful company. They spend a bunch of money on things like boondoggles to Europe for the staff, apartments in Paris that anyone can book, employees sitting around with almost no work to do, etc. They also have really lucrative bonuses (>40%/yr) for employees that push salaries over $200k for senior engineers, so I'm just wondering why they even bother with donations? I'm assuming that their contract with Yahoo is even more lucrative than $300M/year, so they must have a lot of money to spend, why worry about donations that might only reach a small percentage of that?