Mozilla's annual report for 2012 highlights dependency on Google
The Mozilla Foundation has published its annual report for the year 2012 yesterday. The foundation managed to increase the total revenue in 2012 by almost 90% in comparison to the year before. Revenue rose to $311 million US Dollars from $163 million a year before that.
About 90% of that revenue comes from a deal with Google that Mozilla signed back in November 2011 that makes Google Search the default search engine of the Firefox browser until November 2014.
About 90% of revenue came from Mozilla's deal with Google which paid the foundation $274 million in royalties, nearly doubling the 2011 payment of $138 million.
Expenses have not seen the same growth as the foundation's revenue. They did increase to $208 million Dollars from $145 million the year before though.
Software development, program services and branding & marketing all saw an increase in expenses in 2012 compared to the year before that.Â About 70% of expenses went into software development of products such as the Firefox web browser or Firefox OS.
The foundation's net assets rose to $240 million at the end of 2012, up from $170 million the year before covering more than a year of 2012 expenses.
The foundation can plan safely for the two coming years, considering that the deal with Google will end in November 2014 at the earliest.
It is clear that Mozilla is highly depend on that one deal with Google to keep up its operations, and while that is secured until 2014, it should be clear that diversification of income should be a top priority of the foundation.
Mozilla highlights that this is the case in the FAQ that was released alongside the annual report:
We currently have several key business partnerships and are actively exploring new ones, as well as other potential revenue opportunities.Â [..]
Some key Mozilla Foundation projects like Lightbeam have received grants from organizations such as the Ford Foundation.
It is interesting to note in this regard that Firefox's usage share has been in decline for some time now. While it is still a top three web browser in most usage share statistics, all indicate that the browser's share has dropped in the past 12 months.
So what would happen if Google decided not to renew the contract with Mozilla? Mozilla has enough assets to survive more than a year without revenue if expenses do not get out of hand.
If Google declines, other partners may be found, and the most likely one is Microsoft with its Bing search engine provided that the new CEO does not sell or shut down the search engine business.
As it stands now, Mozilla can plan safely for the next two years as money from the Google deal will be available in that time. It should however seek other revenue opportunities in that time to diversify the income and reduce the dependency on a single company in terms of revenue.Advertisement