[Commons-Law] Mozilla revenue speculation erupts

Sat Mar 11 16:57:49 IST 2006

Hi,

   Look at Firefox revenues. Business by any name is a business.
Whether you give away products for free, give away source code for
free, it still remains a business. Those of us old enough to have
tracked the software industry might remember the shareware era (still
lives at www.download.com) where software was given away for free with
voluntary choice to pay if you liked the software - donationware. Open
source is shareware with free source code. Yet, it is just another
business model without revenue-per-piece or source code being the
chief stock-in-trade.The below report shows how firefox earns its
revenues. Oh and it has all the puritanism of the business arm being
separate from the foundation and so on. We cannot mess with the purity
of the open source after all.

Regards,
Hasit
=================
Mozilla revenue speculation erupts

By Ingrid Marson
http://news.com.com/Mozilla+revenue+speculation+erupts/2100-1032_3-6048377.html

Story last modified Fri Mar 10 10:09:30 PST 2006

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The Mozilla Corp., the commercial arm of the Mozilla Foundation, has
said that despite the success of its online applications, it is
focused on strong products, not big profits.

Responding to online speculation around the company's actual earnings,
Christopher Blizzard, a Mozilla Corp. board member, said in a blog
this week that money is just a "tool" that allows the organization 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 realize that it gives us
options," he said.

Blizzard added that an earnings figure of $72 million quoted on some
blogs was incorrect.

"I won't comment on the dollar amount, except to say that ($72
million) is 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 said.

The Mozilla Foundation exists as a Californian not-for-profit
organization and receives donations in a similar way to a nonprofit
charity. This makes the issue of profit controversial. There has been
intense speculation recently on exactly how much the Mozilla Corp.,
and the wider Mozilla Foundation, makes out of the open-source Firefox
browser and how the money is spent.

On Monday, Jason Calacanis, chief executive of blogging network
Weblogs, wrote in his blog that an unnamed source at BarCampLA told
him that the Mozilla Corp. made $72 million 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 about 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
organization managed to spend that amount of money.

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

Mitchell Baker, chief executive of the Mozilla Corp., said in a blog
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 Corp. has the equivalent of 40 full-time staff working for
it, according to Baker, although she did not comment on the
organization's expected growth.

More information, at least on its past revenue and spending habits,
can be gleaned from the 990 Form, which U.S. not-for-profits above a
certain size are obliged to file with Internal Revenue Service. 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 for 2004, which was filed in November 2005, states
that it made $5.8 million in 2004. Of that total, $4.9 million came
from services it charged for, which included revenue from Google ads.
Its expenses that year totaled $2.3 million, of which $1.5 million
went to employee compensation. 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 $5.7 million, an increase
of $3.5 million 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 the 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 projectwide
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--with registration--on
sites such as GuideStar.org.

Ingrid Marson of ZDNet UK reported from London.