Mozilla Goes Corporate; Analysts Say Its All Good

Analysts say the company's move to a for-profit model will mean good things for the open-source community.

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.