Mozilla Goes Corporate; Analysts Say Its All Good

By Libe Goad  |  Posted 2005-08-04

Mozilla Goes Corporate; Analysts Say Its All Good

Mozillas gone corporate, and analysts of all stripes say thats a good thing.

The companys announcement this week that it is creating a for-profit addition to the company, in order to bring in cash from the successful Firefox browser, seemed like a natural progression for most analysts, but all have differing ideas about the Mozilla Corp.s future plans.

"At the end of the day, they are creating a corporation because they see the opportunity to make money and dont want to throw it away," Black Friars analyst Carl Howe said.

Quandt Analytics IT analyst Stacey Quandt says theres more to the desire to bank on Firefoxs success.

She said history shows that open-source organizations form corporations when theyre looking to achieve multiple goals, such as money and legal protection.

"The goal of the organization is to create more mindshare for Mozilla," Quandt said. "Its a logical outcome of the Firefox browser—given the tech initiative and growing adoption."

Gartner analyst Ray Valdes said that just because Mozilla is angling to make a profit doesnt mean that the company will move away from being an open-source entity.

"Theyre recognizing that theres an occurrence in the market that gives them a structure to better respond to that—to possibly deal with that for partnerships licensing, investments, resource allocation," Valdes said. "Its an evolution or a maturing, but not necessarily a complete change."

Howe, whose firm has been keeping close tabs on recent Firefox and Mozilla movements, said that while they might have enough financial solvency that they need to form a corporation, the real question is how they will continue to make money with a free browser service.

"The biggest problem in a browser market is that its free products competing against free products," he said.

The newly minted Mozilla Corp. can make money in three major ways, Howe said. First, the company can take on a Google type plan, taking on an ad program, or it can mimic open-source browser Opera, which uses ad-supported browsing.

Second, the company could branch off from the mainstream browser concept and create customized browsers for cable boxes, phones and TVs.

"Everyones getting into the flat-panel TV business," he said. "They cost as much as PCs and are simply computers with glass on the front—why shouldnt we be able to browse [the Web] from the TV?"

Another way the company can make money is by playing up its reputation as a more virus-free, impenetrable browser. Howe said the new Mozilla could potentially create a brand of security products based on Firefox and sell them to companies for big profits.

"If I were to go to a big company like Exxon Mobile and say, Were going to give you browsers and look for secondary problems and notify the system if anything is found, theyd suddenly have 300,000 places that would use the security," he said.

Next Page: Competing with IE.

Competing with IE

As for truly competing with Microsofts Internet Explorer browser, analysts speculate thats not going to happen anytime soon.

However, Howe said that Mozillas browser, Firefox, and its advanced features, like tabbed browsing and tight security, have reminded the tech giant that browsers are a very competitive space.

Microsoft has responded by putting some of the same features into its upcoming Internet Explorer 8, which Howe said means that people have been paying attention to Firefox.

During the announcement, Mozilla said it was going to keep the nonprofit Mozilla Foundation around as well.

The new corporate side will have its own board of directors, which will be appointed by the foundation.

Though some say this move is nothing unusual, some also say this move was done so the company can save face in a the sometimes-fickle open-source community.

However, no one really thinks new corporate Mozilla would cause a real backlash in the open-source world, aside from a handful of purists on the fringe.

Searching the Web backs that up; only a few have said much in the negative.

After the news was announced, a fervent debate erupted on the open-source news site

Click here to read more about the Mozilla shift from columnist David Coursey.

Many of the comments were, again, positive, but some insist that corporations, even ones backed by good intentions, can never be trusted to uphold the open-source code of honor.

One message board poster mentions the free art and "skin" site, deviantART and points out that once it went corporate, the corporation forced out one of the two original founders.

"The lesson of deviantART is that once the corporation starts pursuing profits, and this becomes more important than the community, the origins of the foundation and the original purpose and driving force of the community may become lost," the message read.

The analysts agreed that few open-source advocates would share this opinion, but Valdes said the for-profit Mozilla Corp. could potentially leech resources from the nonprofit Mozilla Foundation, especially in terms of staff numbers.

"The foundation will have skeleton staff, and the for-profit will have five or 10 times the number of staff," he said. "But I wouldnt put too much meaning into that — my reading is that theyre using that to create a legal structure that will allow them to better accomplish their goals."

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