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Mozilla Business Model | How Does Mozilla Make Money?

Mozilla Foundation is an open-source, non-profit organization dedicated to advancing and leading the Mozilla project.

Founded in July 2003, the organization establishes development policies, manages critical infrastructure, and manages Mozilla trademarks and copyrights.

Mozilla Business Model

Among its subsidiaries is the Mozilla Corporation, which employs most Mozilla developers and coordinates the release of the Mozilla Firefox web browser and Thunderbird email client.

Because the parent wholly owns the subsidiary, it adheres to the same non-profit principles. The Mozilla Foundation was founded by the Mozilla Organization, which was affiliated with Netscape.

The organization is currently headquartered in Mountain View, California, United States, in the Silicon Valley.

What Is Mozilla?

Mozilla is a community-driven organization that actively promotes a user-driven, open, healthy, and secure internet.

I say ‘actively’ because Mozilla helps promote and makes a significant contribution to this effort by developing solid products and services such as Firefox, Thunderbird, and MDN Docs. 

Mozilla’s manifesto explains not only what Mozilla is but also why it is critical.

How Does Mozilla Work?

Mozilla’s operations are managed by members of the Mozilla Foundation and its subsidiary Mozilla Corporation and numerous volunteers.

Mozilla Foundation works on developing and supporting infrastructure for a healthy and open Internet. In contrast, Mozilla Corporation develops and improves products and policies, and experiments to improve people’s online experience.

Both organizations are part of Mozilla. Mozilla is a social enterprise and one of the few companies in its field with a large user base and contributor base.

Thus, Mozilla focuses on two distinct areas:

  • Making the Internet a healthier place for users.
  • Experiment with new technologies while developing Firefox, Thunderbird, and the Pocket app.

Mozilla Business Model

Mozilla’s business model consists of three main parts: the Mozilla community, the Mozilla Foundation, and Mozilla Corporation.

Mozilla vs. Mozilla Foundation vs. Mozilla Corporation

Mozilla Community

Mozilla started as a software community in 1998. It is a voluntary organization of thousands of volunteers dedicated to creating an open and free internet.

Its mission is to develop great open-source software and open-source standards. According to Mozilla, it is devoted to “creating browsers, applications, software, and tools that put people and profit ahead of everything else.”

Mozilla Foundation

The Mozilla Foundation was founded in 2003 as a non-profit organization devoted to leading and managing Mozilla’s community project.

It manages trademarks, copyrights, and other intellectual property and establishes development guidelines. The mission of Mozilla is to foster an open and healthy internet thanks to the Open Source Initiative.

Mozilla Corporation

Mozilla Corporation is a subsidiary of the Mozilla Foundation, which was founded in 2005. The organization invests 100% of its revenue in Mozilla projects.

Mozilla continues to be governed by the Mozilla Foundation and has no additional shareholders or owners.

Firefox Browser is Mozilla Corporation’s flagship product, a Thunderbird E-mail client until January 2020, when MZLA Technologies Corporation acquired it.

How Does Mozilla Make Money? Mozilla’s Revenue Model.

Mozilla is a unique organization in terms of structure, which distinguishes Firefox from Chrome and Safari.

Hence, Mozilla earns money from Search Partnerships For Firefox Browser, Mozilla Corporations profits, Donations from Users and Organizations, and also from the Mozilla Subscription.

As previously mentioned, AOL contributed significantly to the establishment of the Mozilla Foundation. However, the Mozilla Foundation has always been a non-profit organization.

As a for-profit subsidiary, Mozilla Corporation was established in 2005 by the Mozilla Foundation.

The foundational arm of Mozilla is dedicated to safeguarding the health of the internet. In addition to educating citizens regarding ethical issues, it finances and mentors innovators to conduct research and publish papers on topics such as Trustworthy AI.

Mozilla Corporation operates and releases Mozilla products on behalf of the Mozilla Foundation.

As of the Mozilla Foundation’s 2018 annual report, the Mozilla corporation employed approximately 80 people.

Mozilla Business Model

With the help of thousands of volunteers, both Mozilla entities work together under the Mozilla brand.

Mozilla’s Firefox is not only its most popular product but also its primary revenue source.

Mozilla Firefox users conduct over 100 billion searches a year, so even if you’re Google, being the default search engine matters.

Even though users can switch to alternative search engines, Firefox comes preconfigured with regionally specific default search engines.

In China, Baidu is the default search engine. Yandex is the default search engine in Russia, Belarus, Kazakhstan, Ukraine, and Turkey. Google is the default search engine in the rest of the world.

The Mozilla Foundation earned $450 million in revenue and support in 2018, including $429 million from search engine royalties for being the default browser on Firefox. Mozilla Foundation earned 95.33 percent of its revenue in 2018, demonstrating Firefox’s importance to the Mozilla  Brand.

As a software company, Mozilla is different from most others. There are no large-scale paid software suites.

They do not attempt to monetize your data. Because Mozilla is a social enterprise, it only uses revenue-generating methods beneficial to the user and the internet. Mozilla views privacy as a fundamental right.

Then how does Mozilla Corporation pay its employees? How does it pay for legal, marketing, consulting, and all other costs associated with the company? Mozilla’s primary revenue sources  are:

Donations

Open-source projects cannot succeed without the support of their fans and followers.

Even though this is a lesser contribution than search deals, it should not be overlooked.

Furthermore, these contributions demonstrate the public’s faith in the project. The non-monetary contributions to the project and its codebase can also be viewed as indirect revenue or savings,  as they would otherwise force Mozilla to increase developer compensation.

The code contributions allow them to save a significant amount of time and money. Mozilla Foundation is partially funded by donations and partially by Mozilla Corporation’s earnings.

Search Partnerships For Firefox Browser

A browser acts as a middleman between search engines and their users. Firefox’s primary source of revenue is derived from agreements between Mozilla and search engines to make their search engines Mozilla’s default search engine.

Mozilla Business Model

With the expiration of its deal with Yahoo in 2017, the organization achieved its highest-ever revenue ($542 million) through its new deal with Google.

Google, Baidu, Yandex, and Yahoo serve as default search engines in various regions through their global search strategy.

Subscriptions And The Future Of Mozilla

In the software industry, ‘paid software’ and ‘user data’ revenue models are widespread since they work.

In addition to these two revenue models, implementing a revenue model for a software company is challenging. That is especially true for Mozilla, which is also strongly committed to free and open internet principles.

In 2018, 95% of their revenue came from search deals. The majority of this revenue comes from Google, whose browser is Mozilla’s primary rival.

Furthermore, Firefox’s user base has declined despite massive improvements and new features. Mozilla is also trying to diversify its revenue streams for the same reasons.

Mozilla has teased its users about a subscription service it plans to sell since 2019. Two of the most popular were as follows:

Firefox Private Network (FPN) VPN

In 2019, Mozilla launched its VPN service in collaboration with Mullvad after testing it with ProtonVPN.

It is currently only available in the United States and on a few platforms, but it is expected to expand soon.

It costs $4.99, but there will be a free version and most likely a subscription fee when it launches globally.

FPN will be offered in two flavors: FPN browser protection and FPN complete device protection.

FPN VPN has an exceptionally transparent privacy policy that expresses precisely how data is handled and promises that it will not track any network activity.

Firefox Better Web

Mozilla Better Web, launched in collaboration with Scroll, provides users with an ad-free browsing experience on Scroll partners such as Vox, Business Insider, The Verge, The Atlantic, and Salon.

Its mission is to “disrupt the existing advertising revenue model by funding partner sites directly.”

It offers offline reading, dictated articles, tracker protection in Firefox, and synchronization.

Mozilla Business Model | How Does Mozilla Make Money? 1

Currently, it is only available to desktop users in the United States for $4.99 per month. Mozilla is also offering a 50% discount on a six-month subscription to early birds.

Rise and Fall of Mozilla Firefox

Approximately 80% of the browser market was dominated by Netscape Navigator when the consumer internet revolution began in the mid-1990s.

Navigator’s rise demonstrated the web’s importance. It became an existential threat for incumbents and a lucrative opportunity for upstarts when more people started using the browser.

Consider the three tiers of a pyramid. The operating system is located at the bottom of the screen. The middle layer consists of the browser. The top layer contains the search engine.

You would own all three tiers of the pyramid if you lived in an ideal world. For now, let’s focus on the browser. Browsers act as gatekeepers for search engines.

If Google’s search engine were the default in all browsers, for example, it would be the most popular. While Google receives free access to the default search engine on Chrome, it must pay a hefty fee to other gatekeepers such as Safari and Firefox after development and support costs.

Anyway, let’s go back to an era when Netscape Navigator dominated the browser market. During this period, the Windows OS held a dominant position in the operating systems market, but the future would rely more and more on browsers to run applications.

Microsoft recognized this immediately and launched Internet Explorer.

In one sense, Netscape was a small company with limited resources and revenue. Personal and educational use of Netscape Navigator was free, but businesses had to purchase a license.

Microsoft, meanwhile, was a colossal corporation with seemingly unlimited resources and revenue.

Microsoft made Internet Explorer freely available to everyone and included it as the default web browser in Windows, rapidly gaining market share. Microsoft’s Internet Explorer reached 96 percent market share in 2001.

The popularity of Netscape Navigator gradually declined. It served as an illustrative example of how defaults can have such a dramatic effect.

The company was losing market share, so AOL bought the company for $4.2 billion.

Netscape founded another organization called Mozilla in 1998 to work on the Mozilla  Application Suite to create an all-in-one internet package.

A single browser was intended to combine browsing, email, internet forum-like newsgroups, and WhatsApp-like chat clients.

In 2003, AOL abandoned the Mozilla Application Suite and reduced its ties with the Mozilla  Organization.

AOL ensured Mozilla’s independence by helping establish the Mozilla Foundation, a  non-profit organization.

The company transferred hardware and IP, staffed the transition with a three-person team for three months, and invested $2 million in the Foundation.

During the latter half of its heyday, Netscape opened-sourced the code for Netspace Navigators in 1998. Later, Netscape and the Mozilla Foundation entrusted the code of the browser to them.

The Foundation chose a community-driven model, with Firefox being developed in an open-source environment. When Firefox 1.0 was released in 2004, various internal and external factors aided in its growth.

Mozilla Business Model | How Does Mozilla Make Money? 2

To begin, Microsoft made only minor enhancements to Internet Explorer between 2001 and 2004, none of which were noteworthy.

Updates were slow, especially in comparison to when Microsoft was battling Netscape Navigator for market share. Due to Internet Explorer’s monopoly, Microsoft had little incentive to continue innovating.

Simultaneously, Internet Explorer experienced a security crisis, with the US government warning consumers about the browser’s security risks.

Firefox’s security promises. Additionally, the Netscape descendant featured a more user-friendly interface, improved performance, and many features.

As if all of this wasn’t enough, Microsoft announced shortly after Firefox’s launch that future versions of Internet Explorer would require installing Windows Vista.

While Internet Explorer remained technically free, Microsoft was indirectly pressuring users to purchase Vista.

Firefox’s market share increased steadily over the next five years (peaking at 32.21 percent in 2009) until Google Chrome launched.

By the end of 2012, Chrome had surpassed Internet Explorer and Firefox in market share, claiming victory in the second browser war.

Despite Chrome’s victory in 2012, some estimate that the second browser war ended in 2017. 

Chrome had a market share of 55.04 percent in December 2017, while Safari had a market share of 14.86 percent. The duopoly controlled 83.27 percent of the market in September 2020.

To fully understand Firefox’s defeat in the second browser war, it is essential to understand how the browser failed. Mozilla’s decline can be attributed to both internal and external reasons, as with Internet Explorer.

“As an engineering organization, I believe there was a point when we became complacent,” says Selena Deckelmann, an engineer who joined Mozilla in 2012 and is now the vice president of Firefox’s Desktop Product Development.

She had to review crash reports generated by Firefox when something went wrong, giving her a front-row seat to the product’s flaws.

In addition to Firefox’s woes, Android and iOS offered Google Chrome, and iOS gave Safari the same advantage Microsoft had with Windows on desktops.

Firefox’s demise was sealed when it failed to keep up with technological advances, especially the ability to run parallel operations across multiple CPU and graphics card cores.

Firefox has changed a lot in the last few years. Mozilla announced in 2016 that it was working on a new browser engine called Quantum.

The web engine, which resides at the core of the browser, is responsible for all the content you view while browsing the web.

Firefox released its first Quantum-based version in November 2017. Even though the enhanced performance received rave reviews, it was insufficient to convert many Chrome and Safari users.

Mozilla has recently taken a stand against Chrome/Safari, positioning itself as the more privacy-conscious option.

Chrome is unlikely to compete in this field, so the privacy angle is a good one. Google’s business model is centered on advertisements, which relies on collecting as much helpful information as possible.

Safari browser from Apple has made strides in ensuring user privacy, but iOS devices are the only ones that can access it.

In any case, what privacy-related features does Firefox offer?

Let’s talk about those ubiquitous web trackers first. Among the top 6000 websites, 1903 have more than ten trackers per page.

Whotracksme reports that Google trackers appear on 80% of web traffic, while Facebook’s tracking pixels appear on 25%.

It is prevalent for web users not to be aware that their personal information is collected, consolidated, traded, and sold without their authorization.

Firefox comes with Enhanced tracking protection by default. The feature disables social media tracking, cross-site tracking cookies, crypto mining, and tracking content in private windows on all sites.

A Privacy Protection Dashboard provides information about trackers that have been blocked in the last week, broken down by type.

The Mozilla Corporation shared a blog post on October 22nd, claiming to have blocked 1 trillion tracking links cumulatively since 2nd June 2019.

A firewall, such as Firefox Monitor, notifies users if their data has been compromised, in addition to providing details such as when they were compromised and what type of data was affected.

Lockwise for Firefox is an extension that lets you manage your passwords.

Firefox uses 256-bit encryption, ensuring no one, including Firefox, can see your private credentials. 

Firefox users can access both their Firefox-saved passwords and those stored outside the browser securely. Firefox uses 256-bit encryption, ensuring no one, including Firefox, can see your private credentials.

Mozilla Corporation acquired Pocket in 2017 after it was introduced as an extension for Firefox in 2007. There were 17 million users of the pocket application, “Read it Later,” in 2015, and 1 billion articles were saved with it.

Will Firefox win the Browser War?

Regaining market share from Chrome and Safari seems impossible at this point. However, a  browser security breach or antitrust enforcement action could convince a large number of users to switch to Firefox.

The privacy-first approach may win Firefox support from a few privacy-conscious technologists, but most users never change their default browser settings. 

Furthermore, there are a few other privacy-conscious browsers available such as Opera, Vivaldi, and others.

In the browser war, Chrome and Safari are Goliaths. Firefox is David, and it will prevent stagnation of the browser market after Internet Explorer’s first victory.

Final Thoughts on Mozilla’s Business Model

The Mozilla community is experiencing a period of growth. Though they have plenty of cash on hand, they are currently adopting a more conservative approach.

In addition, Mozilla is not one of the world’s largest technology companies but rather a social enterprise that aims to create a better online environment, which makes growth even more difficult.

Mozilla is currently focused on developing new robust and stable revenue streams. With the subscription models, the transition of Thunderbird from the Mozilla Foundation to MZLA Technologies Corporation, and the new support contract with KaiOS, Mozilla is expanding its revenue streams and expanding its audience.

About the author

Madhav

Hey Folks, I am Madhav! I lead a team of Marketers at Tech Startup based in Australia. In my free time, I dissect the business models of various businesses. And if there's any free time, I cook some new Dish!