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.
It is "TheNextWeb" here, so not exactly deep journalism. Its true that if Google declined to support Mozilla that Microsoft could get in there for less than the $300M that Google paid, and it would probably push Bing closer to parity with Google in terms of searches done.
So more accurate reasoning is "Search advertising is the best, Mozilla drives a lot of traffic, any search engine would love to have 'control' over Mozilla's choice of default search provider and how that works to insure they get the traffic from Mozilla customers."
So no, Mozilla doesn't need a 'backup' plan unless Bing goes away.
>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.
Well, even if he could shop around for another job, relying on MS like that means a sudden firing combined with an illness/mortage and/or worsening job market conditions can seriously hurt him.
The problem here is that Mozilla gets a large part of its income from a company that almost makes the exact same product.
That should make Mozilla feel uncomfortable whenever their agreement with Google is up for extension.
On the plus side, they know they can get money elsewhere if Google were to drop out; they could jump to the Bing camp. That's about their only alternative, though.
Also, their ability to get a good new contract depends heavily on their market share.
Imagine that that software engineer at Microsoft was becoming less productive and knew that Microsoft was hiring young engineers and that there was only one other company he could get a job, and that that company was also hiring young engineers. That should make him worried.
Yahoo and DuckDuckGo give money to Linux Mint for including them in its default Firefox configuration. I imagine they'd be interested in expanding that to all Firefoxen if Google and Microsoft weren't buying.
What if 90% of a politician's campaign funds came from one source?
It doesn't have to be overt, I doubt Mozilla makes many decisions by asking themselves, "will this make Google happy or unhappy?"
But consider that Mozilla knows what Microsoft and Yahoo's top bids were. Their ability to switch from one funder to another is dependent on how high those bids were.
That is not the same situation. With a politician, one source can contribute X, and another source can contribute Y, and both of their contributions influence the politician. In other words, if the politician loses a source of donations equal to 90% of his or her donations, there is probably nothing that would replace that donation. The only supply is percentage of the politician's time so to speak, which might effect how much someone is willing to donate in the absence of another donation, but probably not in the way the politician would like.
With Mozilla, the supply is one item, the default search engine for the search bar, something which has high demand. That means if Google were to become less interested in paying for the search bar, Bing would be waiting at the gates to do so. They could lose money if that were to happen, given that Google was the highest bidder, but that in no way makes them beholden to Google.
Not sure what you mean by high demand, it has certainly has had strategic value, but the grand total of companies that would be interested in the search box are Google, Microsoft and Yahoo.
I wouldn't be looking forward to the next set of negotiations if I had Microsoft and Yahoo as my fallback positions.
Well, it must be different. The two companies compete directly on a number of products and Mozilla's decisions on whether to adopt things like NaCl, for instance, can't be too pleasing to Google.
Yet, I think you'd be right to question the independence of a politician who got 90% of their funding from Google. Maybe it is different because people interested in entering politics have less integrity and produce nothing of value so they are more in thrall to their biggest customer. ;-)
Maybe it is more like the academic projects I've worked on. 100% of the money is from the US Government but none of us are patriotic in the least. We just care about doing the research.
Or how about the US government, which gets most of its funding from US tax payers and China and never seems to do anything that pleases either group.
Or children that get all of their basic needs met by their parents and still grow up to rebel and hate them.
I think politicians are just a special case in being particularly worse than the average human being in terms of ethics, morality and intelligence. :-)
> a Principal Engineer at Microsoft relies on Microsof[t] because it provides 90% of his income
I would not exactly call this hypothetical person completely independent. Sure, they can go off and find somebody else to rely on anytime they want, but they are currently relying on one company in particular.
I don't get your argument at all. Clearly no-one would expect a senior employee of Microsoft not to further Microsoft's interests, so your analogy contradicts your thesis.
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.
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.
> $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.
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.
The President's benefits package is mind-bogglingly rich. Besides the incredible pension and almost all expenses paid while in office and on vacation and campaigning, the job is a golden ticket to $millions in "speaker fees" afterward.
Bwahahahahahahahaaaaaaaaaaaaaa!!!!!!!!!!! Perhaps you are accurate with the first half of the first sentence, but unless your definition of VP doesn't match what medium/large corporations actually consider to be VPs (in technical areas), you are completely wrong.
", 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"
I tend to see that too. its pretty evil too. get flash update? chrome bundled at random. navigate google sites? site may not display correctly unless you download this "link to chrome"
and so and so forth. for many users its confusing and they don't know how it happened or how to go back.
> 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.
Chrome probably got there the same way Firefox got there - a well meaning individual (you, in the case of Firefox) installed it and told them to use it because it is "better".
Also b/c anytime you visit Google.com on any non-Chrome browser, it tells you to install Chrome for faster browsing. Google.com is so sparse that Chrome ad sticking out on the side is quite effective.
I wish I could find a "market share over time" chart but I can't. Anyways, IIRC I don't believe Chrome is still taking (much) aware from Firefox. They did for a long time but then flattened. Recently Chrome has dipped a little and Firefox is up: http://thenextweb.com/insider/2013/11/01/ie11-takes-1-49-mar...
When I installed Flash Player on a Windows laptop recently, I was surprised to see a download bundle featuring Chrome. I thought it was the other way around: install Chrome and you get Flash whether you want it or not.
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.
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.
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.
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.
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.
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.
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.
That's probably because it's not worth nearly as much to MS or Yahoo. I'm sure a non-trivial percentage of users would change the default search away from Bing.
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.
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.
Google isn't backing them with $300M/year because Mozilla is pumping out good open source software. They are doing it to maintain their dominance in search and keep Bing, DDG, Blekko at bay. For example, they have a similar deal with the closed source(till recently) Opera browser.
I wish Mozilla would stick to its principles and switch the default to a privacy conscious search engine like DuckDuckGo and give it a much needed boost in keyword relevance data.
Mozilla cares a lot more about happy users than about your principles. They're not going to switch to dramatically worse search results just to appease the tin hat crowd.
> They're not going to switch to dramatically worse search results just to appease the tin hat crowd.
Calling them the "tin hat" crowd would suggest that they are delusion when, in fact, the U.S. government has repeatedly admitted that they are spying everybody and they don't understand why anyone should complain.
An incorrect albeit widespread misconception. Mozilla is _both_ the Mozilla Corporation, an ordinary business, _and_ the Mozilla Foundation, a not-for-profit organization.
True, but not in contradiction with my earlier statement.
The corporation's charter is to support the Foundation's goals through market activities not allowed for nonprofits, not to generate profit as a traditional joint-stock corporation.
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.
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.
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.
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.
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 ?
"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."
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.
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.
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.
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.
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?
Other companies want to pay Mozilla; Google just won the bidding war in this case. In fact, in other countries other companies do pay Mozilla (I believe they've had a partnership with Yandex for Russian users in the past)
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.
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).
It's pretty hard to that and keep the project open-source. If you don't keep it open-source, the amount of bugs to fix will overwhelm you and it will be just a failure.
The contrast between Mozilla and Apple is that one needs the money and the other one doesn't, and that makes all the difference.
Apple can pick and choose their deals. If Apple decided to give Microsoft the search box for free to spite Google they could do it in a second.
Mozilla is completely dependent on monetizing the search box. I think at $100 million per year, Microsoft was interested in bidding for Mozilla's search box. At $300 million, it was untenable.
