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Google deal produces 88% of Mozilla's revenue

Separately, Mozilla notes IRS audit over 2005 income from partnership

November 19, 2008 12:00 PM ET

Computerworld - The Mozilla Foundation's revenue was up 13% in 2007 over the year before, as the organization continued to profit from its partnership with search giant Google Inc., Mozilla's chairman said today.

"Our revenue remains strong; our expenses focused," said Mitchell Baker, Mozilla's current chairman and the former CEO of Mozilla Corp., in a post to her blog.

According to the audited financial statement Mozilla released today, the company's revenue for 2007 totaled $75.1 million, up 13% from 2006's $66.8 million, with the bulk of the year's income coming from Mozilla's search deal with Google.

Search royalty payments accounted for $68.2 million, or 91% of 2007's revenue, said Mozilla's financial statement; that percentage was down slightly from the 92% of 2006's income attributed to search.

About $60 million, or 88% of the search royalties, came from Google, with the remainder from other agreements Mozilla has with Yahoo Inc. and Amazon Inc. Interestingly, although Mozilla's total search revenues were down in 2007, the percentage attributed to the Google deal went up; in 2006, 85% of all search income, or $52.3 million, came from Google.

The agreement between Mozilla and Google pays the former for assigning the latter as the default search engine in Firefox, and for click-throughs on ads placed on the ensuing search results pages.

Mozilla renewed the deal with Google last August and signed a three-year contract that ends in November 2011. At the time, the agreement was set to expire this month.

Baker noted, however, that the growth in the revenue it received from Google failed to keep pace with the increase in Firefox's user base. "[Although] the Firefox user base and search revenue have both increased from 2006 ... search revenue increased at a lesser rate than Firefox usage growth as the rate of payment declines with volume," Baker said.

During the same period, the number of people using Firefox on a daily basis nearly doubled, Baker maintained, growing from 27.9 million in 2006 to 48.9 million in 2007.

The financial statement also showed that Mozilla's expenses ballooned in 2007, climbing 68% to $33.3 million from 2006's 19.8 million. Most of that increase was pegged to new spending on software development, which increased 75%, to $20.7 million in 2007 from $11.8 million in 2006.

"Expenditures remain highly focused in two key areas: people and infrastructure," said Baker. "By the end of 2007, Mozilla was funding approximately 150 people working full or part-time on Mozilla around the world." The biggest concentrations of paid employees are in the U.S., Canada and Europe, although it has smaller outposts in China, Japan, New Zealand and South America.

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