It happened to Lenovo and other laptops when they started installing spyware (Superfish) on their machines. They basically ruined the brand image that took years to build up.
They need money to achieve their mission though: maintaining a browser (in a landscape of evolving security challenges, performance & web standards) and research (e.g. projects like Rust, Servo & pdf.js originated that way) is not cheap. And currently it mostly comes from search engine deals. If they cannot get a similar one, it all collapses.
I can see why they try to diversify their income. That said, I don't agree with the way they do it here.
IMO coding missile software to pay for those projects would be a lot more ethical than what they're doing. Yeah I consider the ad industry and its privacy crushing consequences worse than weapons almost never fired.
Something has gone very wrong with the culture of mozilla in general, I think its a copout to suggest that its merely some evil pointy haired boss.
But this is happening way to often lately, and the typical "I stay at Moz because we are still doing good stuff and no one else would step in" you hear from employees is exactly the card that the management plays. It's sad, because the mission from Mozilla's manifesto is more important than ever, but MoCo is not the place where this important things will happen.
If there is causality, Cliqz wasn't just a controversy, it was a loss that the benefit of Quantum will have a hard time counteracting.
We will have to see what drop, if any, the Robot controversy brings.
And speaking of which, I made a post prior to FF57 asking where the Cliqz situation went and got no responses. Any idea as to what happened with it? I haven't seen any updates on the situation since and feel like it's just been swept under the rug.
Mozilla has also made an official statement saying that no user data will be stored, so break that promise would be misleading of customers, and their Privacy Statement does not constitute the storing of such data, so allowing it anyways would count as violation of contract.
Additionally, they're testing it in Germany, where this sort of hidden collection of data either has to be obvious (for example, if you order something online, it's clear that they have to process your address), which is clearly not the case with Cliqz, or the user has to be prompted for opt-in, not either the case with Cliqz, or it may not be personal data. So, if it were personal data, they'd be violating German law.
And the handful of shitstorms in tech-focused online communities are hardly the end of the world for Mozilla. Making the internet rely less on search engines, which is what they're ultimately trying to achieve with Cliqz, is more important than that.