Mozilla Rakes in the Cash

How much money can you make from a freely available open source product? If you’re Mozilla, the answer is a lot.

Mozilla Corp. President Mitchell Baker said in an official blog post that Mozilla’s fiscal year 2006 revenues reached $66.8 million. The company’s haul represents a 26 percent increase over its 2005
reported revenue of $52.9 million

Mozilla’s rise in expenses surpassed its increase in revenue, with costs ballooning to $19.8 million up from only $8.2 million a year earlier. According to Baker’s statement, which spokespeople said serves as the official source of information on the company’s earnings, 70 percent of Mozilla’s 2006 costs came from expenditures on personnel.

Those funds were spent on the 90 employees that Mozilla funds, and includes both full- and part-time personnel. Though Mozilla only actually pays 90 people, the actual scope of people contributing to the project is significantly larger. Baker reported that for Mozilla’s flagship Firefox 2.x browser, there have been over 1,000 people that have actually contributed code. The number of contributors balloons to 16,000 for the number of people that reported bugs to Mozilla.

Mozilla’s other costs come in the form of bolstering its infrastructure in order to support user downloads. Baker claimed Mozilla’s server delivers more than 2.1 terabytes of data per day, representing nearly 600,000 Firefox downloads daily.

So where did all of Mozilla’s newfound income come from? The same place that it did last year — from Google. Mozilla has a revenue deal with the search leader through which it receives referral fees; Google pays it for searches that come from a Google search form integrated into the browser’s default start page. As it turns out, though, it’s not a straight line from more users to more revenue.

“Search revenue increased at a lesser rate than Firefox usage growth as the rate of payment declines with volume,” Baker said in the posting.

In an online FAQ accompanying Mozilla’s 2006 financials, Mozilla further disclosed another concern: The deal with Google ends in November 2008.

If it’s unable to secure a renewal, the open source group said it has the option of falling back on its significant savings. For 2006, Mozilla reported assets (which include retained earnings) of just over $74 million, which is up from the $52.4 million reported for 2005.

Mozilla also addressed the question of how closely it is tied to Google, since most of Mozilla’s revenues come from the online search giant.

“We talk to Google about the parts of the product that offer Google services (i.e., the Firefox Start Page) and the services they provide, like anti-phishing,” the FAQ states. “Otherwise Google does not have any special relationship to Mozilla project activities. We do not vet our initiatives with Google.”

Mozilla recently released an update to Firefox and is currently working on its next generation Firefox 3 browser, which is expected to ship in 2008.

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