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Mozilla taps in-Firefox ads as it searches for more revenue

Now dependent on Google for 88% of its revenue, browser maker will test ads out on new users

February 12, 2014 01:51 PM ET

Computerworld - Mozilla has kicked off a project to show ads to new users of its Firefox browser, a move one analyst said is a search for revenue beyond the firm's overwhelming reliance on Google.

"They're in need of new revenue," said Susan Bidel, an analyst with Forrester Research. "It looks like they're exploring a 'native ad' strategy, which is the shiny new object for publishers and others searching for ways to make money."

Mozilla acknowledged that the project, dubbed "Directory Tiles," had a goal of raising revenue for the non-profit Mozilla Foundation, which in turn funds the browser maker. "Diversifying the source of revenue for Mozilla" was one of three goals a company spokesperson said Mozilla had in mind when it came up with Directory Tiles.

The concept is straight-forward: When new users start Firefox, they will see pre-populated tiles, some of them "sponsored" -- in effect advertisements -- on the New Tab page. For long-time Firefox users, that page, which has room for nine thumbnails, shows the most-frequently-visited websites. Someone new to Firefox, of course, would see nothing. To jump-start the experience, Mozilla will fill the New Page spots.

"Some of these tile placements will be from the Mozilla ecosystem, some will be popular websites in a given geographic location, and some will be sponsored content from hand-picked partners to help support Mozilla's pursuit of our mission," wrote Darren Herman, a former advertising executive and venture capitalist who joined Mozilla last year as its vice president of its new content services group. "The sponsored tiles will be clearly labeled as such, while still leading to content we think users will enjoy," Herman added in a Tuesday blog.

Mozilla is dependent on several deals with search providers for almost all its revenue, with the bulk stemming from an agreement with Google to use the Mountain View, Calif. company's search engine as the default for most Firefox users.

Revenue from the Google deal accounted for 88% of the Mozilla Foundation's $311 million total in 2012, the last year for which the organization has released financial figures.

Last time Mozilla and Google met at the table, an agreement was struck after the expiration of the previous deal, with Mozilla getting a major pay raise to about $300 million annually. That deal expires in November.

Mozilla created Herman's group late last year, hiring him to lead its effort to diversify the foundation's revenue sources into anything from advertising to subscription fees. The search for new income could be simply prudence at work, or Mozilla may believe an agreement with Google will be difficult to strike or result in lower revenue.

According to Web analytics company Net Applications, Firefox owned 18% of the world's desktop browser usage share in January, down from 22% in late 2011 when it last dealt with Google. Firefox has virtually no user share of the mobile browser market.

Herman spoke earlier this week at the Interactive Advertising Bureau's (IAB) annual leadership conference, talking up Mozilla's push into mobile with its Firefox OS and the new Directory Tiles ad opportunities.

Mozilla and online advertising groups, including the IAB , have crossed swords of late, especially over a plan by Mozilla to automatically block all third-party cookies. When Mozilla last year said it was adding that feature to Firefox, online advertisers went ballistic.

Last July, Randall Rothenberg, president and CEO of the IAB, accused Mozilla of being anti-business, hiding behind a veneer of populism and harboring "techno-libertarians and academic elites who believe in liberty and freedom ... as long as they get to decide the definitions of liberty and freedom."



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