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.
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.
> 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.
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.
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.
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.
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.
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)
[+] [-] saosebastiao|12 years ago|reply
[+] [-] ChuckMcM|12 years ago|reply
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.
[+] [-] coldtea|12 years ago|reply
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.
[+] [-] gagege|12 years ago|reply
[+] [-] Someone|12 years ago|reply
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.
[+] [-] skarayan|12 years ago|reply
The concern from people is always about too much power (control) in the hands of a select few.
What choices will they make?
Will they be the best choices?
How will we know?
How much transparency will there be?
Some of these might not apply directly to the open source world, but Google is at the forefront of decisions on the internet.
[+] [-] huxley|12 years ago|reply
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.
[+] [-] hackula1|12 years ago|reply
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.
[+] [-] Tloewald|12 years ago|reply
[+] [-] jldugger|12 years ago|reply
[+] [-] shooper|12 years ago|reply
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.
[+] [-] jstalin|12 years ago|reply
https://static.mozilla.com/moco/en-US/pdf/Mozilla_Audited_Fi...
[+] [-] kibwen|12 years ago|reply
"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.
[+] [-] themodelplumber|12 years ago|reply
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.
[+] [-] ebbv|12 years ago|reply
Alternative revenue models are needed. Unfortunately, reducing costs is probably also necessary.
[+] [-] untog|12 years ago|reply
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.
[+] [-] Touche|12 years ago|reply
[+] [-] 27182818284|12 years ago|reply
[+] [-] abhididdigi|12 years ago|reply
[+] [-] untog|12 years ago|reply
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.
[+] [-] shooper|12 years ago|reply
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.
[+] [-] manishsharan|12 years ago|reply
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|12 years ago|reply
[+] [-] judk|12 years ago|reply
[+] [-] hojoff79|12 years ago|reply
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.
[+] [-] zimbatm|12 years ago|reply
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...
[+] [-] jlgaddis|12 years ago|reply
[+] [-] pearjuice|12 years ago|reply
It is only logical for them to invest in spots they can gain this data from.
[+] [-] mrweasel|12 years ago|reply
I wonder if Mozilla could survive solely on funds from their users or if it's two different worlds.
[+] [-] owenmarshall|12 years ago|reply
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.
[+] [-] tvanantwerp|12 years ago|reply
[+] [-] k__|12 years ago|reply
There are many out there who use their products on a daily basis.
[+] [-] kevingadd|12 years ago|reply
[+] [-] Touche|12 years ago|reply
[+] [-] guiomie|12 years ago|reply
[+] [-] unknown|12 years ago|reply
[deleted]
[+] [-] wnevets|12 years ago|reply
[+] [-] Zigurd|12 years ago|reply