With Firefox Hot, Mozilla Goes For-Profit Route

Updated: The nonprofit Mozilla Foundation has set up a commercial subsidiary to cash in on the popularity of its flagship Firefox browser.

With its flagship Firefox emerging as a legitimate alternative to Microsoft Corp.s dominant Internet Explorer Web browser, the nonprofit Mozilla Foundation wants to cash in on the revenue-generation possibilities.

The open-source group on Wednesday announced a major reorganization that includes the creation of the Mozilla Corporation, a for-profit subsidiary to ride the Firefox gravy train.

Mozilla Corp., which will operate out of the Foundations Mountain View, Calif., headquarters, has been set up as a wholly owned commercial subsidiary to generate revenues to support development, testing, and productization of the various Mozilla open-source technologies.

"The broad adoption of Mozilla Firefox has created significant economic value both in Firefox itself and in a commercial ecosystem that is developing around Firefox," Mozilla said in a statement.

Mozilla described the economic value as "an unintended but real by-product" of its goal to provide a browser with enough market share to drive open standards on the Web. "Carefully managed, this value and the resulting ability to generate revenue can be used to make the Mozilla project self-sustaining and help keep the Internet open and diverse," the group added.

Mitchell Baker, who has served for the past two years as "chief lizard wrangler" at the Mozilla Foundation, will assume the title of president of Mozilla Corp. All 36 employees at the Foundation will immediately move over to the Corporation.

Brendan Eich, a co-founder and longtime technical leader of the Mozilla project, is now the chief technical officer of the new corporation, while the board of directors will remain the same except for the addition of Reid Hoffman, chief executive of social networking service LinkedIn Corp.

While making no bones about its intention to make money from Firefox and other high-profile projects, Mozilla officials are wary of possible backlash from hard-core volunteers who helped push Firefoxs market share with the aggressive Spread Firefox grassroots campaign.

/zimages/2/28571.gifClick here to read about Firefoxs gains in user share against Internet Explorer.

"[The] purpose is not to generate a return on investment in the financial sense. It is not an investment vehicle or an IPO candidate. It is completely owned by the Mozilla Foundation," Baker said in a blog entry detailing the reasons for the reorganization.

Frank Hecker, director of policy for the Mozilla Foundation, said the decision to create a subsidiary had been in the works for several months and is unrelated to Microsofts decision to push out an IE refresh.

Hecker, who chaired the advisory committee that led to the creation of Mozilla Corp., said it was a no-brainer to create the separation to pursue business relationships within a for-profit taxation framework.

"There are existing relationships with search engine providers that will be transferred to the new Corporation. These relationships will continue in the context of the new organization thats better positioned to generate revenues to continue the Foundations work," Hecker said in an interview with Ziff Davis Internet News.

"In my mind, commercial activities around open source and free software are not antithetically opposed. People have had businesses and commercial entities built on open source and free software. This is no different," he said.

Once the code remains free and open and the licensing terms remain unchanged, Hecker thinks the volunteer community will continue to provide support.

"The Mozilla Foundation is just as free and open source as it was yesterday," he said, noting that the Foundations project has always had commercial involvement. Mozilla has in the past received financial and staffing contributions from such companies as America Online Inc., Google Inc., IBM and Novell Inc.

"The people involved from the very beginning knew that there were commercial interests involved. I dont think it will be an issue where people will be concerned about contributing code," Hecker said.

Contrary to published reports, Hecker insisted there are no plans for the new unit to start charging for product support for the various Mozilla projects. "There is no plan to offer support services and we wont be charging for Firefox either. Those products will remain free," he said.

"As a personal opinion, I think the goal of the Foundation and the Corporation should be to encourage commercial companies to get involved and build value on top of these products. It doesnt make sense for Mozilla to attempt to be all things to all people," he added.

The Mozilla Foundation, which is working on Firefox 1.5, does not plan to distribute its own versions of Firefox and Thunderbird and it will continue to allow others to distribute versions of Firefox and Thunderbird in accordance with the Mozilla trademark policy.

The Foundation has published a list of frequently asked questions to explain the division of responsibilities between the two organizations.

Editors Note: This report was updated to include comments from Mozilla officials and more details on the new subsidiary.

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