Mozilla's search revenue jumps 31%, likely due to nearly $1B Google deal
- 15 November, 2012 21:34
Mozilla today said that income from search partners climbed 31% last year, hinting at the reportedly lucrative deal the open-source foundation struck with fierce browser rival Google.
Royalties, almost all of which come from search services like Google, Microsoft, Yahoo and others, were $161.9 million, up by nearly a third from 2010's $123.2 million.
Nearly all the Mozilla Foundation's 2011 revenue came from search providers, which paid the organization for leading Firefox users to their websites. In 2011, royalty payments accounted for 99% of the year's income, slightly lower than the share of Mozilla's revenue attributed to search in the last three years, when losses in other areas, such as the organization's investments or currency exchanges, pushed total income below that of royalties.
Mozilla Foundation is the not-for-profit organization that oversees Mozilla Corp., the commercial firm that develops Firefox for desktop and notebook PCs and Macs, and Android smartphones.
According to the audited financial statement ( download PDF) released Thursday, total revenues for 2011 were $163.5 million, up 35% from 2010's $121.1 million.
Mozilla no longer discloses the amounts it received from each search partner. But in an FAQ also published today, the organization said: "The majority of Mozilla's revenue is generated from search and commerce functionality included in our Firefox product through all major search partners including Google, Bing, Yahoo, Yandex, Amazon, eBay and others."
That was virtually a word-for-word repeat of the phrasing it has used for the last two years.
Historically, Google has accounted for most of Mozilla's search royalties; in 2008, the last year Mozilla split each partner's revenue contribution, Google's payments made up 88% of the total.
Last year's dramatic boost to royalty income -- 31.4% over the year before -- was a significant uptick from past years' increases. The average annual increase during the five-year period from 2006-2010 was 19.6%, just over half that of last year.
Although the boost could have been due to more Firefox users, it seems unlikely, as the browser's share of the global market has slipped 16% in the last 12 months, according to Web metrics firm Net Applications.
Another possibility: The three-year search agreement that Mozilla and Google signed late last year.
According to reports, the new deal required Google to pay Mozilla almost $300 million annually to keep its search engine the default in Firefox.
Mozilla's revenue from its search deals -- primarily the one with Google -- jumped 31% in 2011 to about $162 million. (Date: Mozilla Foundation.)
The two companies acknowledged the new contract in late December 2011; both declined to comment on the specifics of the deal, or confirm the $300 million annual payment.
If the agreement was dated retroactively to the November expiration of the previous contract -- Mozilla never dropped Google as Firefox's default during the interval between the end of the earlier contract and the announcement of the renewal -- the new deal could have accounted for the bulk of the royalty revenue increase.
In 2010, Google paid Mozilla an estimated $103 million, meaning that the new agreement would increase Mozilla's revenue by $197 million each year, or about $16.4 million per month. The royalty revenue gain in 2011 over 2010 was $38.7 million, or very close to two months' worth of Google's larger payments.
But Mozilla faces tougher times ahead. Traditional desktop and notebook browsing has slackened as people reach the Internet from smartphones and tablets, devices where Firefox has a minor presence.
Mozilla has created an Android version of Firefox, but its share is so small it isn't even measurable by Net Applications. Nor has Mozilla crafted Firefox for iOS, which controls the bulk of smartphone and tablet browsing. The organization had declined to do so because of Apple's stringent rules that require other browsers to use iOS' built-in WebKit rendering engine.
Yet mobile's share of all browsing has been steadily growing, with mobile's portion setting a new record of 10% in October.
And Firefox OS has yet to bear fruit, although the organization has promised the browser-based mobile operating system will debut in early 2013 on inexpensive smartphones from a pair of Chinese manufacturers. Mozilla has also lined up several carriers, including Sprint in the U.S., Germany's Deutsche Telekom, Italy's Telecom Italia and Spain's Telefonica, to sell devices powered by Firefox OS.
Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is email@example.com.
Read more about internet search in Computerworld's Internet Search Topic Center.
Join the Computerworld Australia group on Linkedin. The group is open to IT Directors, IT Managers, Infrastructure Managers, Network Managers, Security Managers, Communications Managers.
Should Australian businesses fear US cloud vendors?
If you haven't retired Windows XP and haven't been fired yet, get busy
Apple dominates 64-bit mobile chips as Android rivals lag
TPG's FTTB plan could upset NBN: Switkowski
TPG's FTTB plan could upset NBN: Switkowski