Posts Tagged with “Corporation”

Yesterday one of the folks at the Mozilla Corporation mentioned that he still has trouble describing the relationship between the Mozilla Corporation and the Mozilla Foundation cleanly and easily. He asked me to write something. I tried out a description David Ascher had suggested a few weeks back, and a discussion followed. I’ve tried to capture the gist below. Many thanks to David for providing the first two sentences, which of course frame the discussion.

The Mozilla Corporation is a private corporation with a single shareholder. That shareholder is a 501( c) (3) non-profit dedicated to the public benefit. This means that the Mozilla Corporation — like all corporations — focuses on satisfying its shareholder(s). In this sense organization is very standard. However, in most cases a corporation satisfies shareholders by producing a financial return on investment — dividends and / or higher stock price. This is where the Mozilla Corporation and its shareholder differ from the standard model. The goal of the Mozilla Foundation is to promote the health of the World Wide Web itself by providing free, open source client software. In other words, to serve the public good. So the Mozilla Corporation satisfies its shareholder by promoting this public benefit, not by seeking to maximize revenue.

The Mozilla Corporation should be a professional, run well organization. It must continue to work with and lead the open source community in our shared efforts to create great software and enable growth and diversity on the web. It must work well with commercial entities using Firefox and building on Firefox. It should treat its employees with respect and be a great place to work. It must recognize and support the contributions of non-employee contributors who play such a critical role. It should generate revenue to support the Mozilla project where appropriate.

So some of our activities will look business-like — that’s how one works well with commercial entities, and this is critical to long term success. Other activities will not look at all like “business as ususal.” They will be driven by our open source DNA and our community. And our ultimate goal is most distinctly not business as usual; it is supporting the health and vitality of the web itself.

The Mozilla Foundation has created a wholly owned subsidiary known as the Mozilla Corporation to help achieve the Mozilla Foundation’s goals of promoting choice and innovation on the Internet. We’ve done this to respond to the success and growing market-share of Mozilla Firefox and the new opportunities this makes possible. Mozilla Firefox is approaching 10% market share, with figures showing usage several times higher in selected groups and countries. We’re reaching the point where Mozilla Firefox is becoming a significant element of the Internet experience and has growing influence within the Internet and software industries.

This presence brings a range of opportunities. Many of these opportunities involve working with other commercial entities. Some involve generating revenue. This is an exciting time, both because our products are so well received and because the opportunity for the Mozilla Foundation to become self-sustaining in terms of revenue makes the long term vitality of the project much greater.

The Mozilla Corporation is created to respond to these opportunities. Non-profit law is reasonably well understood for traditional non-profit organizations like museums, universities and the traditional style of charities. But organizations like the Mozilla Foundation, which develops and distributes consumer software, are new in the non-profit world and the application of nonprofit laws to their activities is a developing area. We’ve found that this uncertainty makes responding to Mozilla Firefox’s success very complex. It is difficult to know what relationships with commercial organizations make sense for a non-profit or how to structure them. It is difficult to know what activities the non-profit should and shouldn’t engage in. It is difficult to determine what ways of generating revenue make sense for a non-profit and which ways of generating revenue are not appropriate.

The Mozilla Corporation has been created to address this. The Mozilla Corporation is a taxable entity and so is legally permitted greater freedom of action that is the Mozilla Foundation. The Mozilla Foundation will use this ability to interact with commercial entities and to generate revenue only in those cases where doing so meets the goals of the parent. In other words, its goals and mission are the same of the Mozilla Foundation, only it has greater flexibility in how to meet them. If it makes sense to generate revenue (as we currently do through search relationships) the Mozilla Corporation will look at doing so.

The Mozilla Corporation is legally a taxable, or in general terms, a “for-profit” entity. However, it is not a typical commercial entity. Its purpose is not to generate a return on investment in the financial sense. It is not an investment vehicle or an IPO candidate. It is completely owned by the Mozilla Foundation to promote an open Internet, where consumers have choice and innovation thrives.

More information about the Mozilla Foundation and the Mozilla Corporation and the relationship between them can be found at: www.mozilla.com or www.mozilla.org/reorganization.

The health of the Mozilla project, its long-term sustainability, and its role in maintaining diversity to the web is critical for the web. The Mozilla Foundation is extremely important in this goal, and extremely important to me personally. Many people, myself included, have worked for years to see the Mozilla Foundation come to life, the Mozilla project grow and tens of millions of people choose Mozilla products. The Mozilla Corporation is another organizational tool to bring these goals about.