Mozilla relies on search deals for 98% of revenues

Computerworld - Mozilla today said that income from its search partners, including rival browser maker Google, increased by 19% last year.

Royalties, almost all of which come from search services like Google, Microsoft, Yahoo and others, were $121.1 million, up 19.3% from 2009's $101.5 million.

The vast bulk of the Mozilla Foundation's revenues came from search providers, which paid the organization for leading Firefox users to their websites. In 2010, royalty payments accounted for 98% of the year's revenues, a percentage point higher than the share of Mozilla's income attributed to search in the two years before.

Mozilla Foundation is the not-for-profit organization that oversees Mozilla Corp., the commercial firm that develops Firefox.

According to the audited financial statement (download PDF) released Monday, total revenues for 2010 were $121.1 million, up 18.1% from 2009's $104.3 million.

Revenue growth last year was just over half that of the 34% increase Mozilla touted for 2009.

This was the second annual report in a row that Mozilla did not disclose the individual amounts it received from its search partners.

Instead, in a FAQ tied to the report, Mozilla repeated nearly word-for-word a line it used last year: "The majority of Mozilla's revenue continues to be generated from the search functionality included in our Mozilla's Firefox product through all major search partners including Google, Bing, Yahoo, Yandex, Amazon, eBay and others."

Historically, Google has accounted for most of Mozilla's search royalties; in 2008, Google's payments made up 88% of the total. That reliance on a rival often raises questions about Mozilla's income stability. Google, after all, creates Chrome, the browser that is gaining on Firefox, which currently has the No. 2 spot behind Microsoft's Internet Explorer (IE).

Mozilla's contract with Google expires next month, something Mozilla acknowledged but did not specifically predict would be renewed.

"Our largest contract, with Google, comes up for renewal in November," said Mozilla in the FAQ. "We have every confidence that search partnerships will remain a solid generator of revenue for Mozilla for the foreseeable future."

But it's unlikely that Google would ditch the deal, said Al Hilwa, an analyst with IDC.

"These contracts are based on access to users who might be exposed to Google through the browser ... [and] Firefox still has a significant share that is worthwhile to pay for," said Hilwa. "I don't see the value for Google to abandon that crowd because doing so is not going to help Chrome gain any more traction."

According to a pair of Web analytics firms, Chrome will oust Firefox as the second-most-used browser sometime between the end of this year and the middle of 2012.

U.S.-based Net Applications, for example, said Chrome's share of all browsers used in September was 16.2%, while Firefox's was 22.5%.

Mozilla also noted its 2011 revenues included some "very important individual and corporate donations."

The organization's 2010 tax return (download PDF) listed several such donations, including one for $735,000 and another for $175,000. Mozilla did not identify the names of the persons or companies which donated money, however.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His e-mail address is gkeizer@computerworld.com.

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