Mozilla and Google Sign New Agreement for Default Search in Firefox
blog.mozilla.com
blog.mozilla.com
• the agreement appears to be with the Mozilla corporation, rather than the non-profit foundation... but the corporation is 100% owned by the foundation, so the distinction is mainly for tax/accounting/reporting advantages
• the prior agreement delivered over $80 million in yearly revenue to Mozilla (as of the last time I recall seeing credible numbers reported, a couple years ago)
• the prior agreement technically expired 3 weeks ago, so the multi-year renewal negotiations may have had some wrinkles
I hope Mozilla is now earning even more; with the rise of Chrome and iOS they may need it.
tl;dr -- Google contract worth about 100 million in 2010 given the latest public numbers, more than 150% of the total engineering budget.
My rambling notes... I wanted to look into this corporation/foundation distinction to see how much money Mozilla gets from Google. Some highlights from Mozilla's 2010 financial report (2011 isn't out):
http://static.mozilla.com/moco/en-US/pdf/Mozilla%20Foundatio...
1) Mozilla doesn't live off our contributions, not by a long shot: Mozilla only had collected 150k in contributions throughout 2010 and expected at most 1.7 million total (there is a discrepancy in time between when the report is prepared and when donors may actually send the check they promised).
2) Mozilla received 121 million from "royalty revenue" -- anything related to the Mozilla brand: Amazon affiliate programs, search engine branding like this Google deal, and sale of products from the Mozilla shop.
3) According to note 9 (footnotes are always where all juicy info is buried), 84% of the royalty revenue from 2010 is from "a contract with a search engine provider for royalties which expires November 2011." I take that to mean the Google contract. 84% of 121 million is ~100 million.
4) Mozilla's burn rate was 62 million, which means Google paid for the entire Mozilla development effort in 2010. Interestingly Mozilla's burn rate increased 50% from 2009. I can speculate this is from the increased competition from Chrome, but who knows.
5) Mozilla held 105 million -- yes million -- in investments in 2010 (mostly bonds and index funds, check out note 3). Without Google, Mozilla can use this war chest to operate for at least 2 years. That's much, much better than most companies.
6) Last, as a side note: there was a re-org in early 2011 (which I had missed) where Mozilla seems to have folded the thunderbird effort in with the browser team. This could be a "synergy" move, but it likely means they are divesting from that business and putting more people on the browser effort.
Burn rate of 62M is pretty high. That can fund about 300 people plus other costs like hosting. Is that only for the browser or for other projects as well?
300 people is a very low estimate for every single browser development effort on the market right now. For example, Opera had over 700 employees in Feb 2011 according to <http://my.opera.com/haavard/blog/2011/02/01/decade>. I'd be incredibly surprised if Google doesn't have at least several hundred people on just the non-WebKit parts of Chrome, plus the people working on WebKit at Google, Apple, and other places. Microsoft had somewhere between 30 and 50 people working on just the JS engine in IE9, according to unsubstantiated rumors, for what those are worth.
So the short of it is, browsers are harder and take more effort to develop than most people think. ;)
They want this stuff to reach everyone. That means free.
If a non-user-impacting thing can bring money (such as the search deal), then great. If its feature that is only available for subscribers - no way - will never happen.
Google isn't "funding" Mozilla; it's a customer of Mozilla. Their search traffic payments aren't charity or venture capital; they are revenue. Search engines are always willing to pay for large amounts of traffic. Even Opera reports significant revenue from their desktop browser [1][2], which has an order of magnitude fewer users than Firefox. This is not the first time the Google/Mozilla deal has been renewed in the past decade, and I doubt it will be the last. And there are other search engines who will also continue to pay for valuable traffic.
(Note that individual donations are still important for the non-profit Mozilla Foundation, since tax rules limit how Firefox revenue can be used for the Foundation's other activities. Donations help support Mozilla's other projects to build the open web like the current projects in education, journalism, video publishing, and online privacy.)
1: http://www.opera.com/company/investors/faq/
2: http://www.quora.com/How-does-Opera-Software-ASA-make-money
I didn't even imply that, so don't suggest that I did. It's dishonest, and rude.
> Google isn't "funding" Mozilla; it's a customer of Mozilla. Their search traffic payments aren't charity or venture capital; they are revenue.
Yes. I know this. My concern is this customer accounts for, what, 80% of the total revenue? Are you telling me that if this deal feel through, Mozilla wouldn't be impacted? Because that is my concern. From my perspective, despite having contributed numerous times whenever I could to the Mozilla Foundation, it concerns me what would happen to Mozilla is Google didn't contribute.
Hell, my most recent donation was helped along precisely because of this fear.
> And there are other search engines who will also continue to pay for valuable traffic.
Bing. I have no doubt, but I don't know that. It's all behind closed doors for the most part.
You make it sound like Mozilla doesn't need my donations, and doesn't need the Google deal. Could it do everything it does without donations or Google as a customer? Could it? If so, great!
I feel like I'm being vilified for being concerned.
I'm very sorry!
I hope I wasn't putting words into your mouth. I was reacting less to your comment and more to the repeated use of the word "funding" in all sorts of articles on this topic. I think it both reflects and affects how (some) people perceive Mozilla. For example, the business press would not say that the Defense Department is "funding" a contractor like Raytheon, no matter how big a customer they are.
I'm probably feeling overly defensive after all the articles trying to create drama by claiming Mozilla was in imminent danger of Google "pulling the plug" (when actually a deal was still in place, and both parties were actively negotiating the new one but just couldn't talk about it yet). Within the Mozilla project, we know our userbase is still growing, and the market for search traffic is as strong as ever. But outside, friends are still asking me about these baseless scary stories in the press.
> Bing. I have no doubt, but I don't know that.
Yes I believe Mozilla earns revenue from Bing, and also several other sites, including regional search engines in various locales. In some of our localized builds, Google isn't even the default search engine.
> You make it sound like Mozilla doesn't need my donations, and doesn't need the Google deal. Could it do everything it does without donations or Google as a customer? Could it? If so, great!
Not at all! As I mentioned, donations are very important to Mozilla -- disproportionately important, because in addition to the financial resources, they give us individual support that's important to our existence and activities as a non-profit public service foundation. And income diversification (your stated goal) can't hurt either.
And you're correct that Mozilla would be impacted hugely if for some reason Google stopped paying search affiliates. (But of course, Google would be greatly impacted too, which is one reason I'm not actually worried about this right now.) I have no doubt that Mozilla will grow other sources of revenue if it needs to -- but that's a matter of long-term contingency planning. And no matter what Google does, our own priorities are clear: Make great software that serves our mission and our hundreds of millions of users. As long as we do that, we have leverage and we have control of our fate.
Many successful open source projects run on volunteer contributions, individual donations, sponsorships, and other sources of support. If revenue did decrease for some reason, Mozilla could continue to exist as a smaller organization -- even a much smaller one if necessary, like it was when Firefox was first developed. We wouldn't have the same reach we do today, but we're already used to competing with companies like Apple, Google, and Microsoft that have literally hundreds of times more money than us. Mozilla's biggest strengths have always been in the community and the source code. Steadily-growing Firefox revenue is a lever that helps amplify those strengths, but remember that the success of Firefox created the revenue streams, not the other way around.
I'm glad you're concerned, because these are challenging times for Mozilla and the open web. We do need all the support we can get. But I hope Mozilla gets support based on the great things we've done and will do -- not based on fear that someone else will come along and squash the movement. We will not be squashed so easily!
I'm sorry as well. I probably overreacted. Mozilla is just one of those organizations that I respect and worry over. I remember Netscape, and then Mozilla, and then a little 0.1 browser named Phoenix, and have used every version.
> I was reacting less to your comment and more to the repeated use of the word "funding" in all sorts of articles on this topic.
I do the same far too often. I reply to a specific comment, and instead of replying to that one comment, I reply to everything that comment reminds me of. It's not fair. I understand how easy it is to do.
It's all good. =)
> I'm probably feeling overly defensive after all the articles trying to create drama by claiming Mozilla was in imminent danger of Google "pulling the plug" (when actually a deal was still in place, and both parties were actively negotiating the new one but just couldn't talk about it yet). Within the Mozilla project, we know our userbase is still growing, and the market for search traffic is as strong as ever. But outside, friends are still asking me about these baseless scary stories in the press.
Didn't know you were apart of Mozilla. Should have checked your bio. Btw,
I LOVE YOU GUYS! =)
Anyways, to your point: outside, baseless scary stories or not, it's all we had to go on. Just think about it for a second from our point of view: Google has Chrome, the #1 browser by some accounts, and it's paying Mozilla for searches. And then their deal with Google ends. And nothing is really said from either party. I get emails from Mozilla asking for donations after this happens. Press reports talk about the how much Google as a customer means to Mozilla's bottom line.
So... I get nervous.
> Not at all! As I mentioned, donations are very important to Mozilla
Oh, I realize this. I only wish there was some way I could contribute more regularly. As it stands now, I have to be reminded to contribute. Might it make more sense to help automate that process for those interested? Reddit took the plunge with Gold Accounts, and that seemed to have helped. You don't even need to do anything. Just something that lets me say "Yeah, I'll contribute $X per month, because I love what you do, but fairly forgetful and will sometimes miss the 'Donation' emails."
> Mozilla could continue to exist as a smaller organization -- even a much smaller one if necessary, like it was when Firefox was first developed.
I don't want to see that though. You guys do too much awesome. Besides the EFF and FSF, there is Mozilla. And with you in the ring fighting the fights you fight, I know that someone is looking out for me.
> we're already used to competing with companies like Apple, Google, and Microsoft that have literally hundreds of times more money than us
True, but I'm not. And I see these big 800lb gorillas and remember the days of IE6 dominance and the end of the browser wars. I remember vendor lock in.
> But I hope Mozilla gets support based on the great things we've done and will do -- not based on fear that someone else will come along and squash the movement.
That's a fair point. And a good one.
I'll leave it at that, before I start gushing completely as a fanboy.
Really this is true of open-source software as a whole. There really needs to be a better way to monetize than begging for donations and/or selling T-shirts if these projects are going to live on. As times continue to turn tenuous, this will only become more crucial.
I fully believe in OSS and Mozilla specifically, but the reality is that we have to find a way for OSS to be at least somewhat profitable without relying on the goodwill of a handful (or less) of benevolent entities.
Bing and other search providers would be willing to spend lots of money to have the default search status. Just because Google has always purchased this spot in the past does not mean that google is the only way Mozilla can monetize search.
While I don't believe that selling the default search spot is problematic, I do believe it's risky and dangerous to make that the primary source of revenue, especially when the major potential bidders have serious conflicts of interest with supporting Mozilla (that is, they provide competing or incompatible services and products).
I'm assuming you mean IE.
>nobody should be surprised when Bing plays dirty and intentionally degrades the experience for Firefox users in an attempt to compel a switch to IE
MS would never degrade performance on their own platform. Tying IE into Windows was different; they made the default work better than the alternative. They're not going to intentionally make Bing shitty for FF users; they'll just go elsewhere. They might integrate Bing and IE more fully, adding features and making it more difficult to use other engines, but they would never intentionally degrade their own product.
I dunno what make you think Google is "less evil" than Microsoft in that area. It's just business. Deal profits Google, Google makes deal. When the balance changes, Google will stop making the deal.
Edit: I mentioned this before below, but I'll repeat it up here. I work for Mozilla, but was not involved in the inner workings of this deal. I'm stoked to know where my salary is coming from though :)
While I agree you can also look at this from a perspective of mutual benefit, it's certainly not an obvious open-and-shut deal, especially not with Chrome in the mix. It's simply a matter of priorities, and as I noted in the grandparent, it's easy to conceive a situation where this perspective may shift.
Also, I think that executives care about the opinions of shareholders about as much as Congresspeople care about the opinions of constituents, i.e., they don't care at all unless it looks like something will cause a major disruption to their continued employment.
For more thoughts on this topic, see http://www.squarefree.com/2011/08/12/how-mozilla-could-impro...
Yep, Larry, Sergey, and Eric has dual-class stock AFAIK. I think the real problem with this comes from the greedy legacy MBAs who abuses this.
Mozilla would switch away from Google in a heartbeat if the money was right.
> They could stop giving their browser away and sell an "ad-free" version for $5, which bundles Adblock and blocks google ads.
Simply isn't enough to make up the difference and may even end them if they tried it. Paying for free features and inferior browsers? (Yes I use Firefox but also Chrome.) What is this, 1993?
A massive percentage of the internet using population do not know what a search engine is. I've seen people put "www.facebook.com" into the google search bar. People do not know the difference between the google search bar and their address bar.
Google gets a LOT more money from Mozilla than Mozilla gets from Google! Firefox is not "1%" of the web browsers, its still the major one in many areas, this means billions and billions of Google search uses.
And it does actually please shareholders that such a deal is made. It's a HUGE difference.
Hell... "google" is a verb in the dictionary: http://www.merriam-webster.com/dictionary/google
I presume that the same is also true of eBay in some fashion.
Search YouTube: tube <query>
Search Urban Dictionary: urban <query>
Search Amazon: amazon <query>
Search Wikipedia: wiki <query>
g - Google
gg - Google Group
b - Bing
d - DDG
q - Yahoo stock quote
s - Stackoverflow
w - wiki
y - Youtube
dt - Dictionary
t - Google Translate
Originally you had to dive into a config file to add non-default search providers, but it's now in the UI just like Firefox, right click any text field and select "Create Search".
that's clever.
The query string includes this: tag=mozilla-20
(To be sure, I just checked this in three different instances of Firefox: Iceweasel 9 on Debian, Firefox Nightly on Debian, Firefox 9 on Windows.)
As an analogy, consider Apple and Best Buy. Apple owns its own retail stores, and those stores are competition for Best Buy. But Apple isn't really in the business of retail; they have no reason to stop you from buying Macs and iPads at Best Buy. Retail is just a channel for Apple's real business, and its to their advantage to push their product through the channels they own and the channels they don't.
The browser is a channel for Google's core business of search advertising. Like Apple, they get some benefits from building and controlling a distribution channel of their own. But they have no motivation to stop pushing their core product to users of other browsers too.
http://www.rust-lang.org/ https://github.com/graydon/rust
Coincidentally, for those who like to make much ado about Mozilla vs. Google, Rust has a lot of similarities to Go. (As both projects began as semi-secret, low-key affairs, this is due more to convergent evolution than anything.)
I have an app-launcher-like project I'm working on that could benefit from this kind of arrangement, but browser toolbar scammers seem to have scorched the earth.
Anyway, great to see this deal continue. This is a great partnership that I presume both sides would like to keep going, but the details still have to work out right.
Sort of like Pixar and Disney in the 90's. Then again, Disney didn't figure out how to make Pixar-quality movies back then, yet Google has definitely figured out how to make a world-class browser.
I fully understand why, of course — they have lots of tools and expertise for verifying the authenticity of web-based queries, but software has to monitored in a different and likely less scalable (maybe even human-driven?) way.
And Google hardly needs to pursue desktop apps' small (and, to be fair, traditionally risky) traffic source, so in turn they haven't developed the technology to make that scale better.
I still love Google search though, so I wish I could use them. Instead I have to choose between monetizing what is clearly very valuable search traffic and giving users a search experience I think is outstanding. It's really frustrating.
If anyone has any ideas how I can cut this Gordian knot, feel free to get in touch via my profile info.
This sentence lets one think about the importance of openness in the Open Source community. I wonder if the community would accept the same clause if Microsoft/Bing were to provide the next three years of Firefox searching.
Money is money. Absent some evidence of a conflict on the part of people at Mozilla, I would have no objection to that clause from MS/Bing. I would object to the deal as a whole on other grounds, though.
May I ask why?
Mozilla was testing having Bing search defaulted in their Test Pilot project. So I suspect such a deal may have been very close.
(I think Microsoft actually offers such a Firefox from their site)
It'll be just as closed. It would still have some remains of open source, but the technologies wouldn't work with anything non-Google.
Which essentially is the same thing.
Heh, Mozilla should start MozillaSearch :P
Hypothetical future scenarios based on some rather extreme assumptions I do not agree with are not going to change that.
You are, of course, free to reach different conclusions, but the level of hostility and condescension I've received here for voicing my opinion in response to a direct question is disturbing to say the least.
That said, there are some things that simply cannot be disclosed.
Does that hurt Mozilla's mission? I doubt it. It is simply part of the operational process.
Have you seen Firefox with Bing btw?
So, no.
I would guess significantly larger. And Apple's WebKit engineer's efforts are also of value, making it effectively even larger.
> Google probably spent a good chunk of $100m on advertising Chrome; television spots and subway posters don't come cheap.
It's much more than that. Chrome is advertised pretty much everywhere online, and it has deals with lots of shareware software, where Chrome is installed along with for example Adobe Acrobat. The cost of all of these user acquisition strategies has to be way more than $100M.
I wouldn't be surprised if the dev alone would cost slightly over 100M. (And Mozilla runs the whole company on that, not just Firefox's dev)
(Disclosure: I work for Mozilla, but have no knowledge of the inner-workings of the new deal.)