Mozilla: We're not asking for donations because we're poor

Denies link between Firefox fundraiser and flat search revenue in 2013

Mozilla last week denied that there was a connection between flat search revenue in 2013 and recent fundraising efforts that have asked Firefox users to donate to the nonprofit.

In a blog published Friday, Mark Surman, the executive director of the Mozilla Foundation, and Denelle Dixon-Thayer, who leads the organization's business and legal affairs, said that search revenue and donation solicitation were separate efforts, with the money from each going to different projects.

"Some articles have stated that our search revenue is declining and suggested there is a link between our search deals and our philanthropic fundraising campaigns," Surman and Dixon-Thayer wrote. "Neither thing could be further from the truth."

The two Mozilla executives were referring to news accounts last week of notices appearing on Firefox's start page that asked users to contribute between $3 and $20 to the foundation, the organization that controls the for-profit Mozilla Corp., the browser's developer. Some of those news stories drew a line between the dots of Mozilla's 2013 revenue and the fundraiser.

Mozilla's finances remain "healthy," said Surman and Dixon-Thayer, and again asserted that "there is no link between our search deals and our fundraising activities."

The two are "tied to totally different parts of Mozilla's work," the executives said, pointing out that search revenue funds development of the Firefox desktop and Android browsers, the Firefox OS mobile operating system, and other work, like its synchronization service. Donations and grants, meanwhile, support educational, public awareness and other projects, including the recent push to make privacy a high priority on the Internet.

Almost all of Mozilla's revenue for 2013, the last year for which it has reported financials, came from search deals that make various providers, notably Google, the default in Firefox. Of the $314 million in revenue for 2013, $306 million, or 97%, came from the search deals.

The Google agreement, which was signed in late 2011 and expired last month, provided Mozilla with approximately $275 million, or 88% of the 2013 total.

Surman and Dixon-Thayer also said the small growth in revenue from 2012 to 2013 -- just 1%, tiny compared to the 88% gain between 2011 and 2012 -- had been expected. "The increase between 2013 and 2012 was consistent with the contract terms we agreed," they said, referring to the search deals Mozilla had struck.

Nor will revenue in 2014 show much growth. "We expect similar results in 2014, the final year of our three-year contract with Google," wrote the executives.

Mozilla won't report the results of its latest round of search provider deals, including the one it negotiated with Yahoo to be the Firefox default in the U.S. and Canada, until late 2016.

Contributions, meanwhile, amounted to $2.3 million last year, and when grants were included, $6.9 million. The former was just seven-tenths of 1 percent of all revenue, while the latter accounted for 2% of the total.

Surman's and Dixon-Thayer's contention that there was no link at Mozilla between search revenue and contributions seemed to be backed up by the Mozilla Foundation's 2013 tax return (download PDF). The organization spent $11.3 million to support its educational work, volunteer outreach, fellowships and research last year. Its revenue was slightly more than that: Approximately $13 million from a combination of donations ($6.9 million) and payments made by Mozilla Corp. to license trademarks, notably that for Firefox ($6.1 million).

But while Surman and Dixon-Thayer maintained that Mozilla's finances were healthy, others might disagree, especially if 2013's higher rate of spending continued. Overall, expenses increased 42% year-over-year, with software development -- Mozilla's largest expense -- jumping 38% and marketing climbing by 60%.

Along with flat revenue, that dropped Mozilla's profit -- its disclosed revenue minus expenses -- from $102 million in 2012 to just $19 million in 2013.

Firefox users who want to donate to the Mozilla Foundation -- and who do not see the plea in their browser -- can do so from this website.

Copyright © 2014 IDG Communications, Inc.

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