Mozilla Reports Flat Revenue a Day After Dropping Google for Yahoo

By Sean Michael Kerner  |  Posted 2014-11-21 Print this article Print

As the open-source browser vendor is set to change search providers, financial details emerge on its most recent fiscal year, showing a slight bump in revenue.

It's been a busy week for Firefox developer Mozilla. On Nov. 19, Mozilla announced a major shift in its business model away from Google being the default search engine in its open-source Firefox Web browser in favor of Yahoo. A day later on Nov. 20, Mozilla released its 2013 financial statements and annual report, showing flat year-over-year revenue growth.

For 2013, Mozilla reported revenue of $314.10 million, up from $311.0 million reported in 2012. Unlike in the past, the 2013 revenue figure shows a relatively flat growth rate. Back in 2005, Mozilla's reported revenue was $52.9 million, but grew by 26 percent in 2006 to $66.8 million.

Mozilla's revenue mix includes multiple components, with the largest line item being royalties from search engine partnerships. In fact, 90 percent of Mozilla's 2012 and 2013 royalty revenue came from a single source: a search partnership with Google that ends this month. Mozilla has had a search partnership with Google for the last decade, and for that period it has been Mozilla's largest source of revenue.

For 2013, Mozilla's royalty revenue was reported at $306.05 million, up from $304.54 million in 2012.

It's not yet known what effect the move to Yahoo as the primary default search provider in the United States and new regional partnerships with Baidu in China and Yandex in Russia will have on royalty revenue moving forward. Mozilla has not officially stated how much it expects to generate from the new partnerships or how the revenue model will work.

"Our new strategy gives us more opportunities to build connections between the browser, websites and services, and the treatment of data that advance our mission and values," Mozilla's Frequently Asked Questions (FAQ) on its 2013 annual report states. "The specific terms of our new commercial agreement are subject to traditional confidentiality requirements, and we're not at liberty to disclose them."

The 2013 royalty revenue growth may have been slow, but when looking at Mozilla's unrestricted net assets, the rate of contribution revenue was faster, with $2.29 million contributed in 2013, up from $855,000 in 2012.

"Contributions are recorded at fair value when the donor makes an unconditional promise to give," Mozilla's financial statements note.

Mozilla also grew its investment portfolio value over the course of its last fiscal year. Mozilla has a line item for Investments under its assets for 2013 stated at $136.20 million, up from $120.83 million in 2012.

Perhaps most notable though is the increase in Mozilla's expenses over the last year. In 2012, Mozilla reported total expenses of $208.59 million, but that grew to $295.46 million in 2013. The company spent much more on software development—$197.47 million—in 2013 than it did in 2012, when $143.19 million was spent. More money was also spent on branding and marketing, with $45.97 million spent in 2013, up from $28.76 million in 2012.

Mozilla in 2014 is not quite the same company it was in 2013. It is aggressively pushing forward on the mobile front with its Firefox for Android Web browser as well as its own FirefoxOS mobile operating system platform. It's not yet known or clear what the revenue contribution will be from Mozilla's mobile efforts.

On the desktop, Firefox development continues at a rapid pace. The Firefox 33.1 browser was released on Nov. 10, providing a new Enhanced Tiles feature that may also add to Mozilla's revenue potential moving forward. Enhanced Tiles are found on a Firefox new tab page and provide sponsor and Mozilla partner messages to browser users.

Sean Michael Kerner is a senior editor at eWEEK and Follow him on Twitter @TechJournalist.


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