Mozilla can live without Google's money, Baker says

Thunderbird spin-off should find its own revenue, the Mozilla CEO adds

Mozilla Corp. will walk away from Google Inc. and the millions it collects from the search company each year, if that's what it takes to stay independent, the open-source developer's CEO promised yesterday.

"We've spent a lot of time and energy making sure that Google understands that it cannot turn us into an arm of Google," said Mitchell Baker, CEO of Mozilla and chairwoman of the Mozilla Foundation. "The things that make Mozilla and Firefox a success [are] the product, and the community that cares about it."

First and foremost, we would protect those things," Baker said. "If the protection of those things would come into conflict with Google, or any of our search partners, we would opt for the community who built Firefox and love Firefox."

If it came down to that choice, Baker was optimistic that Mozilla could do without Google's largess. "There are other ways to make money from a browser," she said. "We could have a more diverse revenue stream. The key is to find business models, or I should say revenue models, that help get things done. Search is a great example, but it's not the only example. Necessity is the mother of invention, and I'm quite confident there are or will be other ways to find revenue that our users are comfortable with."

Tuesday, Baker released the company's 2006 tax return and audited financial statement, which showed that Mozilla's revenues had grown 26%, to $66.8 million from $52.9 million, over the previous year. The bulk of 2006's revenues, the statement said -- 85% to be precise -- came from Google. Mozilla and Google signed a two-year contract last year that pays the former for assigning the latter as the browser's default search engine, and for click-throughs on ads placed on the ensuing search results pages.

The tight ties between Mozilla and Google have come under criticism, such as when Google paid part of some Mozilla employees' salaries, or because of the dependence of Mozilla on search payments for its income. After seeing the 2006 numbers, for instance, Frank Watson, a blogger on SearchEngineWatch.com, said Mozilla should take a new name: Googzilla or GoogleFox.

Baker said those critics missed the point. "We always keep in mind that the contract [with Google] is not forever," she said. "We have a rainy day fund just for that reason. With that, we feel we can pay the mortgage for some period of time if we had to walk away."

According to the financial statement and tax return, what Baker called a "rainy day fund" amounts to $50.8 million in investments and $13.2 million in cash. Those savings have accumulated because of the dramatic difference between Mozilla's income and expenses. While 2006 revenues totaled $66.8 million, expenses were a relatively small $19.8 million.

"We are very focused on spending money well," Baker said. "We treat that money very carefully and don't want to race out and spend on something that might or might not work out. That money was hard won, and not just by us, but by the entire Firefox community."

Even so, expenses have climbed during 2007 and although they will still be outweighed by revenues when the year is out, Baker said Mozilla was spending more. "People, that's a lot of it," she said, noting that 70% of 2006's expenses went toward full- and part-time salaries. Mozilla will also incur additional infrastructure costs this year -- it brought online a European data center in 2006 to better distribute Firefox -- and may begin funding some still-secret projects if not this year, then in 2008.

But the $64 million that Mozilla banked has raised questions from some followers of Thunderbird, the e-mail client that Baker spun off this summer. "So why are you cutting Thunderbird loose then?" asked a user named Kendall in a comment to the blog entry Baker posted Tuesday.

In July, Baker announced that Mozilla was considering cutting Thunderbird loose, and cited Firefox as the company's first priority. The e-mail program's users raised a ruckus over the move, which was finalized last month when Baker said Thunderbird development would be managed by a new corporation, as yet unnamed, seeded with $3 million from Mozilla. Three weeks ago, the only two paid Thunderbird developers quit the project.

Yesterday, Baker said she couldn't say how, or even whether, revenues from Firefox would continue to fund the Thunderbird company. "We would like the new mail company to have its own revenue source rather than it continuing to come out of Firefox," she said. "It's our hope that it finds other sources of revenue. But do we expect that it would be 100%? Not necessarily. Will we fund it for a while? Absolutely."

But the big picture, Baker maintained, is not Thunderbird, or even Firefox, Mozilla's most successful product. "The point isn't just to build Firefox," she said. "The point is to demonstrate how Internet tools can actually be better, be safer, be more open. That's the point that drives us."

Mozilla's 2006 tax return (download PDF) and financial statement (PDF) are available from Baker's blog.

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