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Mozilla
Corporation
Company Profile

by Michael
Gariffo

Copyright 2022, Faulkner Information Services. All Rights Reserved.

Docid: 00021392

Publication Date: 2207

Report Type: VENDOR

Preview

Mozilla Corporation, founded in 2005, is a wholly-owned subsidiary
of the non-profit Mozilla Foundation, which was itself founded in 2003. Known
primarily for its Firefox Web browser, Mozilla also currently produces the
Thunderbird email client and other open-source software projects. Generally lauded for its
focus on open-source software and transparency, Mozilla has leveraged the
success of its Firefox brand to become one of the most well-known
players in the Web browser game. 

Report Contents:

• Fast Facts
• Profile
• Strategy
• Product Lines

Fast Facts

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Name: Mozilla Headquarters
331 East Evelyn Ave.
Mountain View, CA 94041
Phone: (640) 576-5000
Web: https://www.mozilla.org/
Type of Vendor: Software and operating
systems
Founded: 2005
Number of Employees: 700

---

Profile

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Mozilla’s
earliest incarnation
began as a free software project in 1998 by employees
of the now-defunct Netscape Navigator. It earned its name from the
original codename for Netscape Navigator and was focused on
developing the Mozilla Application Suite, an open-source version of
the Netscape Communicator application suite.^1,2 However, it
was not until five years later, in July 2003, that the group was
formalized following the establishment of the non-profit Mozilla Foundation.
The organization was created, in collaboration with Netscape’s parent
company AOL, in order to allow Mozilla to continue after Netscape’s
demise. The Mozilla Foundation had a modest beginning with just a small team
of employees but it was helped along by a $2 million grant
from AOL.³ With these resources and the intellectual
properties drawn from its Netscape origins, the Mozilla Foundation
quickly rebounded and began working towards becoming the organization
it is today. 

The beginning of Mozilla’s modern history occurred in 2005
when the Mozilla Foundation created a wholly-owned, taxable
subsidiary, the Mozilla Corporation. This entity immediately began to manage responsibility for developing the Firefox
Web browser, the Thunderbird email client, and many other open-source
software projects and products. With the entirety of Mozilla’s
Corporation’s profits being reinvested in its parent foundation, the
Mozilla Corporation was quickly able to thrive and help its parent
organization grow and flourish.⁴ 

The business, however, has not been able to continue on an upward
trajectory. In 2020, the company experienced two rounds of layoffs. First, 70 employees, including the all leads in the
quality assurance (QA) operations, were let go. At the time, CEO Mitchell Baker said the company “underestimated how
long it would take to build and ship new, revenue-generating products. Given that, and all we learned in 2019 about the
pace of innovation, we decided to take a more conservative approach to projecting our revenue for 2020. We also agreed
to a principle of living within our means, of not spending more than we earn for the foreseeable future.”⁵
Later that year, citing the sweeping changes required to deal with the Covid-19 pandemic, the company made more drastic
cut of approximately 250 workers, or one-quarter of its team. Setting a goal of becoming a smaller, more
nimble operation,
Baker told the staff in an internal memo, “We’ll experiment more. We’ll adjust more quickly. We’ll join with allies
outside of our organization more often and more effectively. We’ll meet people where they are. We’ll become great at
expressing and building our core values into products and programs that speak to today’s issues. We’ll join and build
with all those who seek openness, decency, empowerment and common good in online life.”⁶

Today, Mozilla is primarily known for the Firefox Web browser,
which currently holds 7.8 percent of the global desktop browser market share,
placing it fourth among all browsers, behind Google's Chrome,
Microsoft's Edge, and Apple's Safari.⁷ Although
this is nowhere near the market share Firefox enjoyed before the
launch of Chrome, it is important to understand that the first
three places among Web browser popularity are held, in order, by Google,
Microsoft, and Apple. All
three browser competitors are massive corporations with billions of
dollars available for research and development – something Mozilla can
only dream of. This makes it all the
more impressive that Mozilla, with its limited resources and much
smaller employee base, can compete with the likes of these household-name tech companies. 

History & Milestone Events

• 1998 – The Mozilla Group is founded within Netscape in
  order to develop the Mozilla Suite, an open-source version of the
  Netscape Communicator software suite. This group goes on to become
  the basis of the Mozilla community, founding its ideals of
  open-source software.

• 2003 – AOL, then parent company of Netscape, provides
  Mozilla with intellectual properties, hardware, and a $2 million
  grant to ensure that it can continue operations following the shutdown of Netscape. The newly formed Mozilla Foundation quickly
  splits the Mozilla Suite into its component parts, creating
  separate development groups for the Firefox Web browser and the Thunderbird
  email client.⁸

• 2004 – Mozilla signs an agreement with Google to use the
  Google Web search as the default engine within the Firefox
  browser’s built-in search bar. The agreement provides Mozilla
  with much needed revenue and remains in effect for the US until 2015 when the
  company transitions to using Yahoo. 
• 2005 – The Mozilla Foundation creates the Mozilla
  Corporation. This taxable entity takes over development and
  branding for all of Mozilla’s products while reinvesting all of
  its profits into the parent organization.
• 2006-2011 – Mozilla reports revenues of $66.8 million,
  85 percent of which is derived from the aforementioned search deal with
  Google.⁹ This trend continues in the subsequent years
  with the majority of the Mozilla Corporation’s steadily growing
  revenues being derived from its search provider agreement. The
  last reported year, 2011, saw the company receiving total revenues
  of $163.5 million from the deal.¹⁰ 
• 2012-2014 – It is discovered that then chief technical
  officer of Mozilla, Brandon Eich, had donated $1,000 to support
  California’s Proposition 8, a ballot item proposing that same sex marriage
  be made illegal via an amendment to the state’s constitution. There
  was a short-lived public outcry over the revelation, but Eich
  retained his position. In 2014, Mozilla appoints Eich to the
  position of chief executive officer, re-igniting the furor with
  much greater intensity. After less than
  one week, Eich voluntarily steps down from his position and is
  replaced.¹¹

  Later in the year, Mozilla signs a
  five-year agreement with Yahoo, switching the default search engine
  for all US users to Yahoo from Google. The terms of the agreement
  are not disclosed.

• 2015 – Mozilla Executive
  Chairwoman Mitchell Baker announces plans in November to
  "uncouple" the Thunderbird project from Mozilla,
  although it will be allowed to remain part of the organization
  until a suitable exit strategy for the email client can be
  established.¹²

• 2017 – Mozilla changes it
  logo for the first time in many years, moving away from its familiar
  red dinosaur head to a version of the company’s name types as
  follows: "moz://a." Later in the year, Mozilla introduces
  "Firefox Quantum," its most comprehensive revamp of the browser in
  several years. The company promises faster speeds and more
  transparent usage with this update.

• 2018 – Mozilla begins incorporating tracking
  protection for users by default. This means that, even without
  manually opting in, users’ browsing behaviors cannot be tracked by
  many Web-based ad agencies and behavior monitors.

• 2019 –
  Mozilla reveals plans for a Firefox Premium service scheduled to
  launch some time later in the year. The service is designed to
  provide all of the same features as the free version of the
  software, while adding additional privacy and security capabilities,
  such as a built-in VPN, cloud-based storage, and more.

• 2020 – Mozilla launches a standalone VPN
  service promising private browsing for users in the US, Canada, UK,
  Singapore, Malaysia, and New Zealand. It is priced at $5 per month,
  and is compatible with both desktop and mobile devices.

• 2021 – Holds its first hybrid "Mozilla
  Festival," an online and in-person event showcasing art, technology,
  social media and more. More than 10,000 individuals participated
  across 87 countries.

Strategy

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The
Mozilla Foundation operates on a set of
ten principles that it refers
to as the "Mozilla Manifesto." The group sees these tenets
as the guiding force behind its business decisions and practices and
calls them the core of its "mission to promote openness,
innovation & opportunity on the Web." The ten principles
are:

1. The Internet is an integral part of modern life – a key
   component in education, communication, collaboration, business,
   entertainment, and society as a whole.
2. The Internet is a global public resource that must remain open
   and accessible.
3. The Internet must enrich the lives of individual human beings.
4. Individuals’ security and privacy on the Internet are
   fundamental and must not be treated as optional.
5. Individuals must have the ability to shape the Internet and
   their own experiences on it.
6. The effectiveness of the Internet as a public resource depends
   upon interoperability (protocols, data formats, content),
   innovation, and decentralized participation worldwide.
7. Free and open source software promotes the development of the
   Internet as a public resource.
8. Transparent community-based processes promote participation,
   accountability, and trust.
9. Commercial involvement in the development of the Internet brings
   many benefits; a balance between commercial profit and public
   benefit is critical.
10. Magnifying the public benefit aspects of the Internet is an
    important goal, worthy of time, attention, and commitment.

Although each and every one of these principles is extremely
important to the Mozilla Foundation, number nine has been the single most
impactful on the ongoing operations of the foundation and Mozilla
Corporation. Essentially, Mozilla founded the Mozilla Corporation
and handed all of its major software products to it in order to be
able to turn a profit. This has allowed the organization to take the
profits made by its commercial entity and re-invest them into
expanding both the non-profit and for-profit portions of its
business. This strategy has allowed Mozilla to continue fulfilling
its mission while maintaining relatively low requirements for its
revenue and profit targets. As long as the Mozilla Foundation and
Mozilla Corporation are taking in enough funds to continue
operating, they consider their mission as having been accomplished.
Thankfully for Mozilla, that goal has been surpassed on a regular
basis with the commercial arm of the company having continually
grown its revenues, thanks primarily to its search deal with Google
and more recently Yahoo. Although Yahoo has since been acquired by
Verizon Communications, the deal remains largely unchanged.

Although Mozilla’s mission of promoting "openness, innovation
& opportunity on the Web" is far more nebulous that most
business strategies, it has allowed the Mozilla Corporation a level of
freedom from investors and overseers that has resulted in the
flourishing of both the Mozilla Foundation’s vision and the Mozilla
Corporation’s bottom line.

Strengths

As previously stated, Mozilla currently finds itself in third place
among all desktop Web browsers by usage, globally. While Mozilla
cannot compete with the likes of Google’s Chrome, it is still a
worthwhile competitor in a space crowded by tech giants. Simply put,
a relatively small organization like Mozilla has, at times, beaten
two of the largest tech companies in the world, Microsoft and Apple,
without anything like the billions of dollars in revenue or tens of
thousands of employees those competitors can bring to the table.
Both of these competitors are diversified, multi-national
mega-corporations, and yet Mozilla has managed to defeat both of
them. 

One of the main reasons behind Mozilla’s ability to compete is its
ongoing agreements with search providers to offer their engines within
the Firefox browser’s search bar. For more than a decade, this deal
was
exclusive with Google in the US. The lucrative agreement netted
Mozilla more than $163 million as of 2011 (the last time the Mozilla
Corporation released revenue figures on this) and was the primary source of
income for the Mozilla Corporation. Although the financial success of
the agreement in the years between 2012 and 2015 remains a mystery,
Mozilla subsequently decided to switch its default search provider in
the US to Yahoo. This agreement is limited to installations by US
users, but still encompasses a massive portion of Firefox’s installed
user base. How this decision has impacted Mozilla financially remains
unknown, as the company
continues to be cagey about its finances. However, it is worth noting that there was little
question that the Mozilla Corporation would be able to secure a deal with
any search provider that it chose. Simply put, the Firefox browser’s
built-in search bar provides such an impressive conduit to bring
users to a given search engine that nearly any search provider on
the planet would be clamoring to become the default provider. 

Finally, Mozilla has a rare, somewhat intangible asset going for it
that many other tech companies would be envious of: people generally
like it. That is not to say that people like its products in the way
Apple has a huge fan base or that people find its offerings indispensable
to their daily lives, or in the way Google’s ecosystem has become deeply embedded in the routines of so many. Rather, people like
the company in a way similar to how they would show partiality to a
favorite sports team or a particularly worthwhile charity. Mozilla,
primarily through the works of its foundation, has successfully
cultivated an image of being "for the people." Its
dedication to openness, privacy, and transparency have allowed it to
swim in the same waters as Google without falling victim to the
perception that it is simply out to gather private data on its users
for sale to the highest bidder. Although this factor may not be enough
to fully counter the clout of a competitor like Google, it has gone a
long way towards helping Mozilla create and maintain the kind of
loyal user base that can keep a company going when even the strongest
competitors come knocking.

Weaknesses

For all of the good will garnered by Mozilla, a hard fact still
exists: It does not have the financial backing of any of its
major competitors. While Microsoft and Apple have their operating
system and hardware businesses, and Google has its Android business
and online advertising empire, Mozilla only has a few modest software
offerings and the aforementioned search agreement to keep it going.
These weapons have, so far, proven to be enough to keep it in the
fight, but it cannot be denied that they are a modest arsenal to throw
against the likes of those three titans of the tech world.

Making matters worse for Mozilla is the fact that two of its
opponents, Microsoft and Apple, get a massive leg up on it when it
comes to getting their product in front of customers. While a user has
to find, download, and install Mozilla’s Firefox, they are simply
presented with Microsoft’s Internet Explorer or Edge and Apple’s
Safari as soon as they power on a new PC or Mac. This incumbent role
has allowed a browser as frequently derided as Internet Explorer to
maintain a sizeable user base, despite the superior options
available.

One might question why, then, is Google so far out in front of the
pack when it comes to browser market share. After all, isn’t the
Chrome browser only shipped with the Chrome OS? And isn’t that a
very niche operating system? What many people forget about Google’s
dominance in the browser space is the effect its ecosystem has on
which browser users choose. In fact, Google’s products and services
are so ingrained in the daily lives of so many people that it would
likely seem silly to them to use anything else as their browser. For
example, an Android user that begins looking something up on the Web
about a given topic can simply bookmark a Web site on his or her
phone, sit down at a desktop with Chrome installed on it, and use
that same bookmark (which has been synced across the user’s Google
Account in the interim) to continue his or her browsing. Similar
situations arise with the syncing of auto-fill information for
online forms, passwords, account info, and more. In many cases, it
is just easier for the user to default to Google’s Chrome because of
the ubiquity of Google’s products. Mozilla does offer a mobile
version of its Firefox browser, but, without being the default
browser for an entire mobile OS, it too faces an uphill battle in
obtaining market share. The result is that Google’s chrome quite
simply has a massive head start thanks to the prevalence of Android
as the most popular mobile OS in the world.

Outlook

Although it may sound odd, Mozilla’s greatest strength in the
future may well be the fact that it has very low standards for itself.
While other companies are devoted to increasing profits and expanding
their margins, Mozilla can say its job has been done well as long as
it continues to exist. This low threshold for success, as well as the
foundation/corporation structure of Mozilla, allows it to maintain a
much lower level of pressure on its own performance. After all, it is
much less likely to have a bad quarter or worrisome year when your
only goal is maintaining your business operations at their current
level. 

That being said, Mozilla still needs funds and resources to
accomplish its mission. To this point, the commercial arm of Mozilla
has done an admirable job of providing the needed income and
partnerships for Mozilla to fulfill its mission. However, Mozilla
finds itself in a time of transition. Google is no longer its
default search provider in the US. The reason for this change, and
whether it was at Google's request or Mozilla's that the partnership
ended, remains unknown. If it was Mozilla's choice, then its new
agreement with Yahoo was presumably a more lucrative one when
signed. Yahoo is, after all, just as hungry for market share in its
own arena as Mozilla.

The fallout from this
change and the effect it will have on Mozilla’s continued operations
remains to be seen. The company has hinted at multiple commercial
offerings since swapping its search provider to Yahoo, including a
paid VPN subscription, and a "Premium" version of the
Firefox browser with a built-in VPN and cloud-based
storage included. However, the company has committed to continue
offering its Firefox browser, in its current form, for free. This
commitment of resources to a product that earns the company
essentially no revenue from the end user may not be the wisest
business decision. However, it is exactly this type of dedication to
its users that has earned Mozilla the reputation referenced above.

Thankfully, Mozilla is very likely not in any real trouble as a whole. As
previously stated, the Mozilla Foundation and Corporation can keep going on a
fraction of what they must currently be taking in and spending. Although
downsizing is by no means a desirable proposition, it does, at least, exist as
an option. Thankfully, it is very much an unlikely one as Mozilla’s Firefox
market share and continued "good works" are unlikely to disappear any time soon,
much to the chagrin of the company’s bigger, more wealthy competitors. 

Product Lines

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report]

Mozilla’s product lines focus primarily
on desktop-class software. While Mozilla did take a short-lived crack
at producing a mobile operating system, that project has since been
cancelled due to a lack of adoption.

Table 1 includes the company’s products and services within its
three current segments.

Competitors

• Apple:
  http://www.apple.com/
• BlackBerry: http://www.blackberry.com/
• Google: http://www.google.com/
• Microsoft:
  http://www.microsoft.com/
• Opera: http://www.opera.com/
• Samsung: http://www.samsung.com/
• Yahoo: http://www.yahoo.com/

References

• ¹ Dave Titus and Andrew Wong.
  "How Was Mozilla Born?" DaveTitus.com. December 2002.
• ² "Netscape Announces Mozilla.org."
  Netscape. February 1998. 
• ³ "Mozilla.org Announces Launch of the Mozilla Foundation to
  Lead Open-Source Browser Efforts." Mozilla. July 2003. 
• ⁴ "Mozilla Foundation Reorganization."
  Mozilla. August, 2005.
• ⁵ Frederic Lardinois. "Mozilla Lays Off 70 As It Waits for New Products to Generate Revenue." TechCrunch. January 15, 2020.
• ⁶ Mitchell Baker. "Changing World, Changing Mozilla." Mozilla. August 11, 2020.
• ⁷ "Desktop Browser Market Share Worldwide: June 2021 –
  June 2022." StatCounter. Retrieved
  July 2022.
• ⁸ Brendan Eich and David Hyatt. "Mozilla Development
  Roadmap." Mozilla. April
  2003.
• ⁹ Gregg Kaiser. "Mozilla Can Live without Google’s Money,
  Baker Says." Computerworld.
  October 2007.
• ¹⁰ "Mozilla Foundation and Subsidiary — December 31, 2011 and
  2010 — Independent Auditors’ Report and Consolidated Financial
  Statements." Mozilla. December
  2011.
• ¹¹ "Gay Firefox Developers Boycott Mozilla to Protest CEO
  Hire." ArsTechnica.
  March 2014.
• ¹² Mitchell Baker. "Thunderbird, the Future, Mozilla-Central and Comm-Central."
  Mozilla. November 2015.

About the Author

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Michael Gariffo is an editor for Faulkner
Information Services. He tracks and writes about enterprise software and
the IT services sector, as well as telecommunications and data networking.

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