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Posted: Wed Aug 03, 2005 1:43 pm
Firefox Goes For-Profit
Lisa DiCarlo, 08.03.05, 6:00 AM ET
NEW YORK - In less than one year, the open source Firefox Web browser has been downloaded onto more than 76 million computers worldwide. Now, the Mozilla Foundation, the non-profit entity that develops and distributes Firefox, is forming a for-profit subsidiary that will eventually capitalize on the browser's popularity.
The Mozilla Foundation will announce today that it has formed a wholly-owned subsidiary, Mozilla Corp., that acknowledges the economic value of the Firefox browser, and will attempt to get a return on it without violating the fundamental tenants of the open source Mozilla Foundation.
"We want to make money if and when it's appropriate for the goals of the project to do so," says Mitchell Baker, president of the Mozilla Foundation. "We don't just want to pull money out of Firefox."
She says that the goal of the new corporation is not to get a return on anybody's investment because "there are no investors." The foundation will be the sole owner of the corporation, and Baker will be its president. She stressed repeatedly that the goal is not to unlock value by immediately jumping into deals with partners. In fact, Mozilla Corp. doesn't even have any short-term plans to seize upon any revenue-generating opportunities.
"But we have to be organized in such a way to move forward once the opportunities arise that we want to take advantage of," Baker says. Mozilla gets many requests from companies who want to build applications on top of Firefox, or otherwise want to know how to get in on the action. "These questions were not being properly addressed, but now we'll have greater action of freedom and response." The subsidiary "lets us deal with revenue, talk about revenue and think about it in a setting broader than a nonprofit allowed."
Indeed it does have value. The Firefox browser, which boasts versions for Mac, Linux and Windows, has an 8.7% worldwide market share, according to July statistics compiled by NetApplications. Microsoft's (nasdaq: MSFT - news - people ) Internet Explorer still has a commanding lead with 86% of the market, but according to NetApplications, IE is losing .05% to 1% of share per month. That could be because Firefox has been deemed by many tech pundits to be faster, more secure and generally technically superior to IE.
Today, the only real revenue generator for Mozilla is a secondary pull-down search box that lets users choose which search engine they want to use, including Google (nasdaq: GOOG - news - people ), Yahoo! (nasdaq: YHOO - news - people ), Amazon (nasdaq: AMZN - news - people ), eBay (nasdaq: EBAY - news - people ) and Creative Commons.
Baker says partnerships with these companies generate several million in revenue annually for Mozilla.
The new subsidiary, which will employ a few dozen people, will address revenue opportunities only within the goals of the foundation, which, according to its charter, is to "preserve choice and innovation on the Internet."
"We know that the best thing for users is not to try to make as much money as you can out of that product," says Baker.
That would seem to contradict the point of setting up a for-profit subsidiary, but since there are no investors waiting in the wings to be made whole, Mozilla has the luxury of picking and choosing deals. And there are many business opportunities it is not interested in pursuing, like auctioning preloaded bookmarks in Firefox.
The two-year-old Mozilla Foundation traces its roots to Netscape Communications, the pioneering company that developed the Navigator browser and was subsequently squashed out of existence by Microsoft. Mozilla, a contraction of the words Mosaic and Godzilla, was the original name of Netscape. That company was eventually bought by the AOL division of Time Warner (nyse: TWX - news - people ). Today the foundation acts as a repository for the many developers who contribute open source code to Mozilla projects, including Firefox, the Thunderbird e-mail program and Camino browser for Macintosh computers.
The foundation has survived off donations, early seed money, revenue from its search partners and ancillary development funding. But its overhead has grown along with its popularity and the outright mainstreaming of Firefox.
"The subsidiary will have the same goals and the same purpose as the foundation," says Baker. "But as we developed market share, we saw the economic value of having that share."
Baker and the folks at Mozilla might not put it this way, but the subsidiary will begin to unlock the substantial value at Firefox. After all, how often can a company say it is gaining share at the expense of Microsoft?
Archived topic from Anythingforums, old topic ID:2356, old post ID:38210
Lisa DiCarlo, 08.03.05, 6:00 AM ET
NEW YORK - In less than one year, the open source Firefox Web browser has been downloaded onto more than 76 million computers worldwide. Now, the Mozilla Foundation, the non-profit entity that develops and distributes Firefox, is forming a for-profit subsidiary that will eventually capitalize on the browser's popularity.
The Mozilla Foundation will announce today that it has formed a wholly-owned subsidiary, Mozilla Corp., that acknowledges the economic value of the Firefox browser, and will attempt to get a return on it without violating the fundamental tenants of the open source Mozilla Foundation.
"We want to make money if and when it's appropriate for the goals of the project to do so," says Mitchell Baker, president of the Mozilla Foundation. "We don't just want to pull money out of Firefox."
She says that the goal of the new corporation is not to get a return on anybody's investment because "there are no investors." The foundation will be the sole owner of the corporation, and Baker will be its president. She stressed repeatedly that the goal is not to unlock value by immediately jumping into deals with partners. In fact, Mozilla Corp. doesn't even have any short-term plans to seize upon any revenue-generating opportunities.
"But we have to be organized in such a way to move forward once the opportunities arise that we want to take advantage of," Baker says. Mozilla gets many requests from companies who want to build applications on top of Firefox, or otherwise want to know how to get in on the action. "These questions were not being properly addressed, but now we'll have greater action of freedom and response." The subsidiary "lets us deal with revenue, talk about revenue and think about it in a setting broader than a nonprofit allowed."
Indeed it does have value. The Firefox browser, which boasts versions for Mac, Linux and Windows, has an 8.7% worldwide market share, according to July statistics compiled by NetApplications. Microsoft's (nasdaq: MSFT - news - people ) Internet Explorer still has a commanding lead with 86% of the market, but according to NetApplications, IE is losing .05% to 1% of share per month. That could be because Firefox has been deemed by many tech pundits to be faster, more secure and generally technically superior to IE.
Today, the only real revenue generator for Mozilla is a secondary pull-down search box that lets users choose which search engine they want to use, including Google (nasdaq: GOOG - news - people ), Yahoo! (nasdaq: YHOO - news - people ), Amazon (nasdaq: AMZN - news - people ), eBay (nasdaq: EBAY - news - people ) and Creative Commons.
Baker says partnerships with these companies generate several million in revenue annually for Mozilla.
The new subsidiary, which will employ a few dozen people, will address revenue opportunities only within the goals of the foundation, which, according to its charter, is to "preserve choice and innovation on the Internet."
"We know that the best thing for users is not to try to make as much money as you can out of that product," says Baker.
That would seem to contradict the point of setting up a for-profit subsidiary, but since there are no investors waiting in the wings to be made whole, Mozilla has the luxury of picking and choosing deals. And there are many business opportunities it is not interested in pursuing, like auctioning preloaded bookmarks in Firefox.
The two-year-old Mozilla Foundation traces its roots to Netscape Communications, the pioneering company that developed the Navigator browser and was subsequently squashed out of existence by Microsoft. Mozilla, a contraction of the words Mosaic and Godzilla, was the original name of Netscape. That company was eventually bought by the AOL division of Time Warner (nyse: TWX - news - people ). Today the foundation acts as a repository for the many developers who contribute open source code to Mozilla projects, including Firefox, the Thunderbird e-mail program and Camino browser for Macintosh computers.
The foundation has survived off donations, early seed money, revenue from its search partners and ancillary development funding. But its overhead has grown along with its popularity and the outright mainstreaming of Firefox.
"The subsidiary will have the same goals and the same purpose as the foundation," says Baker. "But as we developed market share, we saw the economic value of having that share."
Baker and the folks at Mozilla might not put it this way, but the subsidiary will begin to unlock the substantial value at Firefox. After all, how often can a company say it is gaining share at the expense of Microsoft?
Archived topic from Anythingforums, old topic ID:2356, old post ID:38210
