Mozilla millions still 86% Google cash
Mountain View sugar daddy tax audit rolls on
Google still provides 86 per cent of Mozilla's revenue, according to the open source outfit's latest financial statement.
On Thursday, Mozilla released its audited financial statement for 2009, and as in previous years, an unnamed search company is listed under "concentrations of risk." In 2008, Google accounted for 91 per cent of Mozilla's revenues, so the risk has dropped. But 86 is still a very large number.
"The Corporation has a contract with a search engine provider for royalties which expires November 2011," the statement says. "Approximately 86% and 91% of royalty revenue for 2009 and 2008, respectively, was derived from this contract."
The statement also says that the unnamed search-engine provider represented 71 per cent and 80 per cent of 2009 and 2009 receivables, respectively.
In 2009, Mozilla's total revenues totaled $104 million, a 34 per cent increase from 2008. With a blog post on its latest financial statement, the open sourcers say that a "majority of Mozilla revenue continues to be generated from the search functionality included in Mozilla's Firefox product from organizations such as Google, Yahoo, Yandex, Amazon, EBay and a handful of others." But a vast majority of that majority comes from Mountain View.
Traditionally, Mozilla prefers not to mention its Google dependence in its blog posts.
Thanks to this longstanding Google dependence, Mozilla is facing an IRS audit, and the open sourcers say they still don't know when this will be resolved. "As noted last year, the IRS has opened an audit of the Mozilla Foundation," the blog post reads. "We do not yet have a good feel for how long this process will take or the overall scope of what will be involved."
Since 2004, Mozilla has collected a portion of all Google search dollars generated by Firefox traffic. In the US and Western Europe, Google is the default home page — and the default option is the search box in the top right-hand corner of the browser. Mozilla now has deals with various other search engines, including — gasp! — Microsoft, and in some cases, Google is not the default. In Russia, for instance, Firefox defaults to the native Yandex. In China, it defaults to Baidu.
With tensions growing between the two organizations, Mozilla's dependence on Google is certainly a reason for concern. But in multiple conversations with The Reg, Mozilla has downplayed the risk, saying that if Google backs out, there's no shortage of others willing to take their place. Following Mozilla's deal with Microsoft, this doesn't ring as hollow as it used to.
Meanwhile, the pending IRS audit could threaten the tax-exempt status of the not-for-profit Mozilla Foundation. The Foundation received tax-exempt status in 2003, and in 2004, it did not pay taxes on $4,422,674 in search dollars (76 per cent of it revenue), saying that an arrangement with "a search provider...facilitates the dissemination of the Foundation's browser, thereby increasing the accessibility of the internet."
Then, in 2005, the Foundation spun off a for-profit operation, and it transferred multiple search-engine contracts to this Mozilla Corporation. That same year, the Foundation set aside a "tax reserve fund" in case the Internal Revenue Service reviewed the tax status of its 2004 and 2005 search-engine dollars.
In 2008, Mozilla announced that the IRS had indeed launched a review of those two years. Mozilla has argued that its 2004 and 2005 search revenues were royalties and should not be taxed, but it realizes that the IRS may not agree.
In early 2009, according to Mozilla's latest financial statement, the IRS expanded its investigation to the tax years 2006 and 2007. But it appears that these portions of the investigation have now been closed. "As of June 30, 2010, there are two remaining issues the IRS continues to challenge. These include the tax classification of the Foundation's 2004 and 2005 search related revenue and any potential impact on the Foundation's public support test calculation as a result of this classification," the statement reads.
In the past, Mozilla has also said that there has been an "inquiry regarding its tax exemption" because Google provides such a large portion of its revenue. "While the Foundation did not automatically qualify as a public charity with public support at 33 per cent of total support, it believes that it qualifies as a public charity under the facts and circumstances test with public support over 10 per cent," Mozilla says.
If it doesn't pass this test, the Foundation continues, it will become a private charity. And it will have to pay additional taxes. ®
Where did that money go?
Seriously, a company in which Google dumps nearly $100 million a year produced *what*? Firefox 3.6, a recently resurrected (and still not finished) Thunderbird 3.x and a couple of side projects which are not much better than academic exercises?
From that statement it looks like more than $40 million was spent on "Software development". WTF? Where are the results?
And if I'm reading it correctly, $115 million was "Purchases of investments" - again, WTF? Someone is playing Wall street broker in a supposedly charitable, open-source company?
More: Mozilla apparently holds $1.8 million in "Furniture and office equipment" ???
Am I missing something here? Why is all that considered normal?
That should be, "Google still *chooses to provide* 86 per cent of Mozilla's revenue", in much the same way that a pimp may choose not to beat his 'ho on any given night while he's still in a good mood. Who knows what mood Google might be in on a night yet to come...
I sense black eyes ahead for the poor little fox, which in its latter years took to sleeping homeless under bridges.
I think Google are capable of being droogs with a taste for the old ultra-violence. In 10 years from now, people will start to reminisce about the good old days when Microsoft at least decent in their levering of the markets in order to fuel its monopoly. Oh, happy daze indeed...
I cried so hard when they were mean to me.
I posted this in the firefox forums:
It’s a crap browser – simple. I mean I like it more than Googles IDIOT minimalist set up – because I have landed on my head too many times and hate trying to guess at things I rarely use and are hidden; IE – that is just a bag of Microsoft forced vertical integration into everything else Microsoft, and Opera – that is a neandethal set up if ever there was one….
But when you go do a search on “Firefox is shit” and see the amount of sites that come up – and then compare your own experiences and the “Glowing Terms” that the people of the Mozilla foundation speak – of security, speed, stability etc…
Once you get past all the phases of the moon patch up jobs and bullshit – your going to come to the realisation that the core issue is that THIS browser it’s self, and the way that it is programmed; this is the core issue.
The only solution is to have a premeditated act of killing the damned thing off – set up and running in the background….
In Linux it’s Alt-F2, and the command XKILL, then place the RUN button to the right side of the slightly minimalised browser window.
I think the same thing can be set up for Windows, with Ctl + Alt + Del, and have “Kill Process” set up for Firefox, with only the “YES” left to click on before you shotgun this pus bag browser into oblivion.
Of course you could always come back to these forums and resort to waving magic beads, incantations, phases of the moon, astrological charts and putting the fist of Mars into the House of Uranus….
If you vote me up I will stop crying.