Mozilla

Posts Tagged with “revenue”

The SQLite Consortium

February 27th, 2008

Yesterday Robert Accettura made an interesting post about the range of SQlite today titled “The Winner For Most Embedded Is: SQLite.” This reminds me I’ve been wanting to talk about SQLite Consortium for a while. Robert points out thatSQLite is an element of “Adobe Air, Mozilla Prism, Google Gears, Android, iPhone SDK (likely through Core Data API), Ruby On Rails (default DB in 2.0), PHP 5 (bundled but disabled in PHP.ini by default).” I personally would probably say Firefox as well as Prism. In addition, SQLite is an open source (actually, public domain) piece of software. At Mozilla we view SQLite as important both for our product and for advancing transparency, openness, innovation and participation in the Internet.

Last December Symbian and Mozilla became the charter members of the SQLite Consortium. Last week Adobe announced that it has joined the SQLite Consortium, demonstrating Adobe’s recognition of the importance of Sqlite and its participation in various open source projects. Hopefully other organizations that rely on SQLite will do the same.

Here’s a bit more on the history.

A while back Richard Hipp contacted Mozilla to see if we had some time to talk to him about sustainability models. He had a problem we at Mozilla were familiar with — difficulty in getting organizations to fund the development of the core. At Mozilla we have seen this repeatedly — many companies understand why it’s important for them to fund development of the particular aspects of Mozilla that specifically benefit their business. It was much harder to find companies that would fund the core development applicable to all users of Mozilla code.

Dr. Hipp was facing the same issue with SQLite. Many companies were willing — eager even — to enter into contracts to enhance SQLite to meet their needs. But few were funding the fundamental core of the offering. I was embarrassed to learn that Mozilla itself belonged to this group. We had entered a contract with Dr. Hipp some time before to do some work related to full-text indexing support. I knew about this of course but it never occurred to me to ask if the SQLite developers needed funding to maintain the core capabilities. (I should note that Richard didn’t raise this point with us; I asked directly and thus learned of my failing ). Fortunately the folks at Symbian were more perceptive. They had realized that providing stability and sustainability for long term development of the core of SQLite is important and were talking with Richard about how to do this. As a result Richard contacted Mozilla to see if any of our experiences could help him with his thinking.

Once I got over my embarrassment I spent some time talking to Richard to understand his goals for SQLite and to see how best Mozilla could support Richard and SQLite. Richard was clear about the main goals: keeping SQLite an independent project, and freely available for anyone to use. On behalf of Mozilla I expressed a strong interest in the current developers (Richard and his colleague Dan Kennedy) retaining technical direction over the SQLite project and in developing a sustainability model that does not diminish the effectiveness of the technical leadership. The Symbian folks agreed completely, and Symbian and Mozilla became charter members of the Consortium, which was launched on December 12, 2007. The Consortium is described in general terms on the SQLite website, and the form of Consortium Agreement is also available online.

The Consortium Agreement makes it clear that technical direction of SQLite remains solely in the hands of the developers. Consortium members receive access to the developers for support if desired. I noted that Mozilla would join without the support offering solely to provide support to the core developers to do what they think best (and I suspect the other early members might feel the same way). Dr. Hipp felt that it would be easier to attract additional members over time if the support component was retained. I don’t know that Mozilla will make use of this. But I hope that other organizations that use SQLite in their products will find this significant enough to help justify participating in the Consortium.

Joining the Consortium was an easy decision for Mozilla. We use the technology, it advances the Mozilla mission and — most importantly — the SQLite developers themselves are people who combine a fierce dedication to the openness and technical excellence of their work with discipline and structure. Like many great open source (here, public domain) and free software projects, the key developers have enormous commitment to their work. In my discussions with Richard I’ve come to understand that this commitment is combined with integrity, modesty, and an exceptional consistency of focus and quality.

It’s great to see the SQLite Consortium come to life. It’s great to see this grow out of Symbian’s very forward-looking thinking in supporting Dr. Hipp so early on; and great to see Adobe’s quick decision to join the Consortium. And I certainly hope that other companies who aren’t already supporting SQLite development will look closely at keeping SQLite independent and vibrant by becoming Consortium members.

The many aspects of “non-profit”

November 5th, 2007

I’m often asked various questions about non-profits. Many people have a general idea of what “non-profit” means but very few have a specific, technical understanding. This makes perfect sense. The technical understanding is a legal and accounting mix, and specific to legal jurisdiction as well.

Here’s a brief outline of what “non-profit” means — in the technical, legal sense — to the Mozilla Foundation. It’s pretty dense stuff, and I’ll provide only the most basic summary. I think about this a lot but in this post I’ll try to stick to describing the structure.

I. “Non-profit” status

The Mozilla Foundation is legally identified as a “non-profit public benefit” organization under California law. Its property is “irrevocably dedicated to charitable purposes.” The Mozilla Foundation is governed by the California Nonprofit Corporation Law, which is somewhat different from California’s General Corporations Code. I’ve found that the distinctions between the general Corporations Law and the Nonprofit Corporation Law include structural elements — members instead of shareholders and so on, and a set of distinctions which I think of as designed to ensure that the organization is pursuing a non-profit goal rather than pursuing private gain.

II. “Tax-exempt” status

The Mozilla Foundation is also a tax-exempt organization as determined by the U.S. Internal Revenue Service. To be a tax-exempt organization one should be a non-profit organization (as described above), and the purpose of the organization must fit within additional specifications. Once this status is granted, a tax-exempt organizations is governed by a body of regulations and policies determined by the IRS. These regulations are in addition to any requirements imposed by the Nonprofit Corporation Law. These regulations identify permissible purposes for a tax-exempt organization. They also limit the kinds of activities in which a tax exempt organization can engage, especially for activities that generate revenue or that involve advocating for particular laws. In exchange for tax-exempt status, an organization lives with significantly more restrictions on the way it can operate.

III. “501(c)(3)” status

The Internal Revenue Service grants tax-exempt status to several different kinds of organizations. The Section of the Internal Revenue Code that describes the types of exemptions is Section 501. The most important one for our purposes is Section 501(c)(3). This section applies to organizations “organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition . . . or for the prevention of cruelty to children or animals . . .”

The Mozilla Foundation is a 501(c)(3) tax-exempt organization dedicated to promoting the Internet as a universal, innovative platform accessible to all.

IV. “Public Charity” status

There are actually two types of 501(c)(3) organizations. One type receives significant contributions from the public — a “public charity” 501(c)(3). The other type is a “private foundation.” These are generally 501(c)(3) organizations where an individual or family contributes most or all of the money and the charity operates from these funds and the income they generate. Private foundations are required to spend a certain percentage of their funds each year, public charities are not. (There are also two types of private foundations, operating and non-operating.) The IRS reviews 501(c)(3) organizations periodically to see if they are public charities or private foundations. The Mozilla Foundation is currently a public charity 501(c)(3) organization.

For Further Detail

Each of these areas can become complex quickly. This is an area where it takes true experts to fully understand. Wikipedia has a nice overview article. The actual documents relating to the Mozilla Foundation can be found at the Mozilla Foundation website.

After living in this world for the last few years I have many thoughts about where this system works well and where it is unwieldy or even counter-productive. I’ll put those in a separate post before too long.

Beyond Sustainability

October 22nd, 2007

In this post I want to focus on two fundamental aspects of the Mozilla project. First, Mozilla as a giant, wildly vibrant open source project. Second, Mozilla as a force for building an Internet based on openness, choice, participation and public benefit. We’re a force in the lives of individual people and in the Internet industry as a whole. These two aspects of Mozilla are complementary; each strengthens the other. Either one alone would be a great achievement. The two together are a breathtaking accomplishment.

Today we are posting our audited financial statements and tax form for 2006. The highlight is that Mozilla remains financially healthy: we’re able to hire more people, build more products, help other projects, and bring more possibilities for participation in the Internet to millions of people. The Mozilla project is growing in almost every way — size, scale, types of activities, new communities, and in reach.

Financial Highlights

Mozilla’s revenues (including both Mozilla Foundation and Mozilla Corporation) for 2006 were $66,840,850, up approximately 26% from 2005 revenue of $52,906,602. As in 2005 the vast majority of this revenue is associated with the search functionality in Mozilla Firefox, and the majority of that is from Google. The Firefox userbase and search revenue have both increased from 2005. Search revenue increased at a lesser rate than Firefox usage growth as the rate of payment declines with volume. Other revenue sources were the Mozilla Store, public support and interest and other income on our assets.

Mozilla expenses for 2006 were $19,776,193. Expenditures remain highly focused in two key areas: people and infrastructure. By the end of 2006 Mozilla was funding approximately 90 people working full or part-time on Mozilla around the world. Expenditures on people accounted for roughly 70% of our total expenses in 2006. The largest concentrations of people funded by Mozilla were in California, Tokyo, Toronto, and Paris. The number of funded people and of multi-person locations continues to grow. As of October 2007 we have additional concentrations of people in Beijing and New Zealand, with announced plans to increase the number of people in Europe.

Mozilla’s revenue in 2006 exceeded our expenses. Our assets at the end of 2006 were $74,148,710, up from $52,396,387 at the end of 2005. In 2007 we expect our expenses to be significantly higher as we have continued to hire and fund more people and develop additional programs.

Of the people Mozilla funds, the largest single group works on the Mozilla “platform.” This includes all the underlying technology that individuals don’t manipulate directly — networking, layout, understanding content from websites, security, and so on. The work of the platform group supports all Mozilla products and most Mozilla projects. The next largest group is Quality Assurance, which provides formal verification for Firefox and Thunderbird, and informal assistance to other Mozilla projects. Other large groups are the Firefox application group, marketing and outreach, and IT or technical infrastructure. We have small but potent sets of people working on build and release, web tools, our websites (including add-ons), and other functions.

Mozilla’s technical infrastructure also grew dramatically in 2006. In late 2006 we served close to 600,000 Firefox downloads, over 2.1 terabytes of data and 25 million update requests — per day — making Mozilla one of the top 100 sites on the web. In addition, 2006 saw a vast increase in capacity and infrastructure reliability for all essential Mozilla services including the launch of a European datacenter, cutting server response time by 50% or more for much for Europe.

The improvements in infrastructure go beyond machines and moving bits. Our infrastructure for providing add-ons is an example. The add-ons site supports not only Firefox and Thunderbird but also the community projects of SeaMonkey and Sunbird. We’ve also spent a great deal of effort to make our sites multi-lingual, rather than simply “localized.” In the past, key sites such as addons.mozilla.org were English sites that could also provide translated content in other languages. Today add-ons has been rewritten to be language-neutral, meaning that the same service level is available to everyone. This was actually a very difficult and painful process. We did it because more and more non-English speakers are accessing the web, and we want to offer them equal ability to participate in the Mozilla world and the Internet in general.

The infrastructure work is an example of how revenue generated by Firefox is used to provide benefit to the entire Mozilla community. We now have a world-class infrastructure – machines that are tended and optimized constantly, prompt updates with security patches, on call response available when problems occur – which supports a range of Mozilla projects.

In 2006 we began giving grants and funding programs. One area of focus has been improving accessibility for people with disabilities, including people with low vision, mobility and learning disabilities. This work includes accessibility for Mozilla products and also accessibility in general. For example, funding to date has included better accessibility of AJAX-based dynamic web applications and support for building better open source accessibility infrastructure technologies on Windows and Linux. In addition to the accessibility related programs, Mozilla’s other major areas of expenditure have included support of third-party developers of add-ons, and support of a trial program at Seneca College exploring student participation in Mozilla development at colleges and universities. We have also made a series of grants to individuals making contributions to Mozilla projects. This includes hardware, funding travel to allow face-to-face meetings for our distributed community of participants, providing tools and infrastructure (machines and hosting) for community members. We also provided assistance to Creative Commons.

In 2006 Mozilla contributed approximately $300,000 to these efforts. This is a small first step as we learn to spend money without causing unintended consequences in our community. We expect the amounts to expand significantly in 2007 and beyond. For example, so far in 2007 we provided a grant to the Open Source Lab at Oregon State University for its ongoing operations in support of open source projects and the Participatory Culture Foundation for improving open source-cross platform video on the Internet through its Miro Player project.

We’ve started an FAQ and will add to it if new questions come up.

Our financial status allows us to build on sustainability to do ever more. More as an open source project, and more to move the Internet overall increasingly towards openness and participation.

Growth as an Open Source Project

Mozilla is a gigantic open source project and still growing. Tens of thousands of people are involved in the Mozilla project. Over 1,000 people contributed code to Firefox 2. Mozilla employed around 50 of those people. In 2006, approximately 10,000 people downloaded nightly builds every day; this number continues to grow. Sixteen thousand people reported bugs or potential issues in our bug-tracking system; something like a thousand comments a day were added to the issue-tracker. Our new, more precise distributed testing system gained approximately 2000 participants in the first months after its deployment. Tens of thousands of people test our beta and security releases before we offer them to the general public. The Spread Firefox referral program had over 65,000 participants displaying Mozilla or Firefox content (buttons, etc.) on their websites. Uncounted numbers of people participate through promoting Mozilla and helping others learn about Mozilla.

The geographical distribution of Mozilla contributors and usage has expanded significantly. In November of 2006 we shipped Firefox 2 in 37 languages. That’s unprecedented. Comparable products ship in as few as 1 language, with some tools available for a handful of other languages. Thunderbird 2.0 shipped in 33 languages. We’re adding more languages all the time; Firefox 2 is now available in 44 languages and Thunderbird in 36. The translation and localization work for these languages is overwhelmingly done by volunteers who want to see Firefox and Thunderbird optimized for their culture and then vetted through our Quality Assurance team. This is demanding work, often done on a tight time frame. It reflects much of what makes Mozilla great: people’s willingness, even eagerness, to commit time and energy to create something worthwhile. The results bear out the importance of this work: today about half of Firefox usage is in a language other than English.

Mozilla is best known for the Firefox web browser, but the Mozilla community creates many other things as well. This includes the Thunderbird mail client, and a set of other significant projects such as Bugzilla, SeaMonkey (cross platform browing and mail integrated product), Camino (Mac-only browser), Sunbird (calendar application), and Lightning (calendar add-on for Thunderbird). Thousands of people create new functionality for Mozilla products through the mechanism known as add-ons. In addition, people and companies are using Mozilla technology to create whole new applications, ranging from video browsing to music to specialized “in-house” applications.

Impact in the Industry

The Mozilla mission is not simply to be a successful open source project. It is also to develop an Internet where choice, innovation, participation, individual empowerment and public benefit are integral to the fabric of online life. It’s a big vision, and we’re making progress. Already about 120 million people use Firefox and enjoy a safer, more personal browsing experience. Millions use the Thunderbird email client and enjoy an open email experience.

This userbase makes Mozilla relevant to the Internet industry. We’ve always had high mindshare but combining mindshare with a significant number of users makes an enormous difference. As a result, good things happen. For example:

1. Web content is increasingly written to be accessible through Firefox and other standards-focused browsers. This is a fundamental requirement for keeping the Internet a good place. It’s a prerequisite for individuals to have choice and for commercial players to have room to innovate.

2. We are able to drive innovation into the open, interoperable layer of the Internet rather than see it end up in the closed, controlled communities of commercial platforms. An example of this is video. We are working publicly on a shared specification that allows videos to be manipulated in the browser like other content. We have the technology working already. By “manipulate” I mean much more than watching a video, a la YouTube. I mean being able to combine, rotate, overlap, cut and paste video just as we do text today. You can see the possibilities here. This might seem obvious until one realizes that there are commercial initiatives underway to demonstrate that video should be manipulated not so much through the web, but through closed, proprietary development environments and plug-ins. An environment where a single software vendor controls the formats, and ultimately controls whether people using Firefox or other browsers can see the content that results.

3. Innovation is flourishing. Thousands of people have created and tested improvements to human interaction with the Internet. Some of these have been significant commercial successes, such as StumbleUpon which started with a Firefox-specific product and later moved to other browsers.

4. Mozilla’s voice is stronger when fundamental decisions about Internet technology – particularly protocols and standards – are decided. We’re also a force for making these discussions more transparent. For example, the ongoing work on ECMAScript 4 (generally known as “JavaScript 2″) is becoming publicly available for review, comment and participation. A more general example is Mozilla’s involvement with the WHAT Working Group (“WHATWG”), which is pushing development of web standards into open, public forums.

5. Safety and security of Internet life can be improved. Firefox users have been at risk far, far less frequently than people who use the dominant browser. Mozilla is regularly cited as an example of how to respond when alleged safety issues are uncovered. Our approach to security allows more people to do more to protect themselves and others.

6. Public benefit, civic and social value become components of the Internet’s future, complementing the creation of private economic value.

7. Millions of people who would not otherwise know of or care about open source software are exposed to it and experience its power.

Mozilla is a global community of people working together to build a better Internet. We work to build an Internet that is open, participatory and exciting. We create a portion of the Internet that is a public asset, forever dedicated to public benefit.

We do this through by building communities of people who believe in this mission and enjoy working together to make this happen. It’s an inspiring task. It’s hard work. It’s rewarding. It’s fun. And it’s growing.

Mozilla is growing because people choose to join us, because individual human beings make a decision to take action. People participate in a myriad of ways, from building our software to telling others about our goals.

We can make the impact of the Internet on our lives better — better than it will be if Mozilla doesn’t exist; better than we can imagine.

If you are already a Mozilla participant, I urge you to take a moment and reflect on the contributions that together we are making to online life. If you’re not yet a participant, now is a great time to join us.

Thunderbird — Revenue

July 30th, 2007

Some people have wondered if revenue is the reason we’re looking at making some changes in our approach to Thunderbird. The answer is no. No, no, no. The reasons for looking at a change are articulated in the last 5 or 6 posts:

  • The impact of browsing and the Web, as delivered through Firefox, dwarfs Thunderbird
  • Thunderbird is a different enough product and audience that the focus on browsing and the web doesn’t automatically bring Thunderbird what it needs
  • Thunderbird — both its strengths and its weaknesses — are overshadowed by the giant footprint of Firefox.

These issues would concern us whether or not Thunderbird generates revenue. Mozilla is not aimed at maximizing revenue. And Firefox revenue is funding a range of activities beyond Firefox, from infrastructure to Thunderbird employees, to documentation for web services.

Once we figure out what kind of organization makes sense then we can look at what funds it would need. Then we can figure out what combination of money from Firefox and what from Thunderbird activities would make sense. We don’t plan to leave Thunderbird high and dry without funds.

I know from previous comments that some people will never believe this. But repeating myself won’t change that, so I’ll stop here.

The Mozilla Foundation: Achieving Sustainability

January 2nd, 2007

Mozilla is a global community dedicated to improving the Internet experience for people everywhere. We do this by building great software — such as the Mozilla Firefox web browser and Mozilla Thunderbird mail client — that helps people interact with the Internet.

We build great software by building communities. Our software is “open source software.” The source code is available to everyone; as a result people are able to work together and we all share the results of the combined efforts.

The Mozilla project has been building software and communities since 1998.

The Mozilla Foundation recently completed its financial audit and filed its tax returns for 2005. The tax returns should appear on Guidestar shortly, and in any case these materials are available directly from the Foundation. Because the steady revenue stream is so important to our long term sustainability I’ll give an overview here.

History

In 2003 the Mozilla Foundation was established. The Mozilla Foundation is a non-profit organization organized to provide a home for the Mozilla community and stewardship for the assets of the project. The Mozilla Foundation started with around 10 employees. This was just barely enough people to make the Foundation functional and support the community. Still, supporting 10 people is a noticeable financial commitment; doing so consumed most of the funds the Foundation had available to it. (For those interested in historical detail, we had one person for QA, one person responsible for all of our tools and infrastructure, one person for each of the Firefox and Thunderbird front ends, 2 people for all of the rendering, layout and internals, etc, one person responsible for our “build and release” function, one architect, one engineering manager, one person responsible for business development, and me). The employees were stretched extremely thin, struggling to keep up with the opportunities available to the project.

In 2004 we released the Mozilla Firefox web browser. It was the right product at the right time — an elegant product filling a huge need in the market. Millions upon millions of people began using Firefox. As a result we were able to generate revenue by making it easy for people to find and use Internet search services. We began adding employees. We also began expanding our infrastructure — bandwidth for downloads, modernizing the inventory of equipment used to build the software and provide services to developers, update the public-facing websites, etc.

In 2005 Firefox became a product with millions of users, a growing significance in the Internet industry and a significant revenue stream. The revenue is from the easy “search” capabilities built into Firefox and the related revenue relationships with the search providers. We found that our users like the easy, customizable search capabilities, and the revenue could provide financial stability without the need for ongoing fund raising requests to our users or community.

In August of 2005 the Mozilla Foundation established the Mozilla Corporation as a wholly owned subsidiary to guide the development of Mozilla products, including Firefox. Revenue generated by Firefox becomes an asset of the Mozilla Corporation, which is in turn completely owned by the Mozilla Foundation. The assets of the Mozilla Foundation are dedicated to the public benefit. Revenue generated from Firefox is reinvested in the Mozilla project to improve operational capabilities and to provide long-term stability.

The number of people using Firefox increased steadily through 2005 and 2006. The resulting revenue stream from our search partners allowed us to continue to expand. We did so in both engineering for product development, and in the services we offer our userbase. We hired more people. For example, we started to build a professional IT team to handle increased load. We expanded our infrastructure still more to handle the millions of people who came to get and use Firefox. The improved infrastructure was demonstrated during the Firefox 1.5 release in November when our bandwidth requirements went way up and our service levels remained high. We hired more QA folks to both test and work with the community. We hired more engineers. We launched the Mozilla Developer Center, the first time we’ve had an on-going, successful documentation program.

Our revenue stream remains steady. We’re hiring a great set of people, with small teams where before we had a single person. We have a Firefox front-end team. We now have a build team instead of a single person. We have an Information Technology team. We have a set of people thinking about features and user experience. We have a platform team. We have people to respond when reporters call. We have a team of people maintaining our websites and webservices. We’ve been able to return to having a small set of people thinking first and foremost about community development. We’re still stretched very thin and still looking for great people.

Our infrastructure continues to be modernized. We’re upgrading the development infrastructure, in particular the “build” machines and infrastructure, which is a far larger job than it sounds. We’re upgrading the website infrastructure to support easier and more complete localization. Firefox 2 shipped simultaneously in 37 languages. That’s a massive and very rare achievement; I’m not sure who else does this.

2005 Financial Information

In 2005 the Mozilla Foundation and Mozilla Corporation combined had revenue from all sources of $52.9M. $29.8M of this was associated with the Foundation (both before and after the creation of the Corporation). The bulk of this revenue was related to our search engine relationships, with the remainder coming from a combination of contributions, sales from the Mozilla store, interest income, and other sources. These figures compare with 2003 and 2004 revenues of $2.4M and $5.8M respectively, and reflect the tremendous growth in the popularity of Firefox after its launch in November 2004.

The combined expenses of the Mozilla Foundation and Corporation were approximately $8.2M in 2005, of which approximately $3M was associated with the Foundation. By far the biggest portion of these expenses went to support the large and growing group of people dedicated to creating and promoting Firefox, Thunderbird, and other Mozilla open source products and technologies. The rate of expenses increased over the year as new employees came on board. The unspent revenue provides a reserve fund that allows the Mozilla Foundation flexibility and long term stability.

Strengthening the Mission

Our financial stability has enabled us to attract and retain world-class talent, people who have willingly turned their backs on the world of startups and stock options in order to work toward our goal of promoting choice and innovation on the Internet for the benefit of all. It enables us to support massive communities of people who contribute their efforts to making the Internet experience better. It allows us to cultivate competitive, viable community innovation.

The results are significant.

Our userbase is growing and happy. The Mozilla name represents quality and integrity to ever increasing millions of people. The extended community — volunteers, students, employees, developers, evangelists, extension developers, testers, documentation writers — is vibrant and effective. Internet life is a far better experience for millions upon millions of people that it was before Firefox and than it would be without the Mozilla project.

The Mozilla community — buttressed by the financial sustainability of the Mozilla Foundation — represents a powerful force for improving Internet life.

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