I could only find the tax statement for the Foundation. Presumably the Corporation filed a separate tax document. Does Mitchell Baker pull a salary from both? The Foundation's tax statement is for the "Foundations and Subsidary". The subsidary is the Corp.
The Foundation's Board of Trustees certainly wouldn't approve of any money-making scams Seems that there is some overlap between the boards. ?
One community member even suggested Mozilla was being too pure and should try to get rich! I'm not surprised. I often see this attitude from the community towards it's benefactors.
If you read the replies, both in the comments and in the follow-up blog posts, pretty much everyone disagreed with this guy. Open source communities put ideals first. Also, in one of the follow-ups, he mentions that someone wrote to him explaining that, legally, a non-profit can't use its assets (i.e. the Corp) for-profit purposes. The Moz Corp is that its entirely owned by the Foundation, just like a piece of furniture, and thus the non-profit Foundation makes calls the shots.
I've answered your other questions already; reread what I wrote. If you have more detailed legal questions, just email the Foundation directly. I guess in the end we'll just have to wait and see what they do with their money; that's the only way to know for sure.
Every time Mozilla wanted to work on some project with a corporation (like the arrangements with their default search engines or the creation of customized partner builds for eBay and others), they had to consult lawyers to find out if it was legal.
Oversight for a non-profit is a good thing.
The lawyers were there to help navigate ambiguous federal laws. They weren't there to advise on being true to the morals and "spirit" of open source, nor would they be qualified to do so. Still, Mozilla's financial statements (both the Foundation's and the Corp's) are audited and available online.
But besides that, I don't see how using the Mozilla Corporation as a proxy is any different from working with a 3rd party corporation. Either way a business deal is going on with a corporation.
Apart from the legal issues, there really isn't any difference. What exactly is the problem with doing business with a corporation? What business deals have they done that you object to?
The key part of Mozilla's arrangement is that the Foundation is the sole shareholder of the Corporation; the employees don't get any shares to sell off in some kind of IPO (though they'd make a ton of money doing so). This allows it to generate revenue easily through the Corporation, but requires that this revenue must then be used for non-profit purposes (i.e. supporting the project and the internet).
How is this requirement enforced? If the for-profit wanted to spend $10 million as salaried compensation for its top brass, what would prevent them from doing so? They wouldn't even have to report it publically, since they aren't a public corporation.
I don't know what non-profit and tax law requires, but I'd believe the Foundation would be restricted in the use of its assets (which includes the Corp.) in the same way as for any other non-profit. The salaries of the Corp.'s officers are reported in their tax statement, available online. The Foundation's Board of Trustees certainly wouldn't approve of any money-making scams, and neither would the Mozilla community, whose support and help the Foundation & Corp. depend on. That's a much more effective safeguard than tax law.
But tell me, if this was their plan all along, why haven't they done something like this already? There's more than enough available funds to more than double their salaries, instead of hiring more developers and funding more projects.
Didn't they already have this revenue before the for-profit? Didn't they already spend money on developers, QA, etc?
Yes, but not as much. That's the point. Don't you think a ten-fold increase in staff size is significant? They now have whole teams devoted to many areas rather than a single person. Even some bugs from 1999 are getting fixed.
From what I can tell, the Mozilla Foundation grew Firefox with goodwill, donations, and other community support under the heading of a non-profit. They then received a $50+ million yearly windfall from Google. They transferred this windfall from a non-profit to a for-profit in a shell game in which they have complete freedom to do with the money as they wish, with no accountability to the public, and the community is expected to believe that everything will be on the up-and-up.
First, the part about being free to do whatever they want with the money and not be accountable is false, as I've said. And in fairness, the Mozilla Corp. does do the majority of the work on Firefox, not to mention hosting all the project infrastructure and lots of community projects.
It's interesting that the Mozilla community isn't making the big accusations of corruption and control by Google; it's those outside-looking-in that are. The Mozilla community has complained of putting too much focus on Firefox and not more on Thunderbird and, much more importantly, XUL Runner, and of poor communication at times, but not of c
Could you explain, then, why they created the for-profit corporation?
Basically, by law non-profits are restricted in the kind of activities they can perform, particularly in generating revenue. Every time Mozilla wanted to work on some project with a corporation (like the arrangements with their default search engines or the creation of customized partner builds for eBay and others), they had to consult lawyers to find out if it was legal. By performing most of their activities under a corporation, all this legal uncertainty, expense, and restrictions could be avoided. The downside to this was that they had to start paying taxes, but that can be considered a good thing in that it supports society.
I don't even understand how a non-profit can own a for-profit. It just doesn't make any sense to me.
IANAL, but I don't think it's much different than how a university might own an endowment, which consists of stock in various for-profit corporations. What makes something a non-profit is not what it owns but what it uses its assets for (generating revenue vs. furthering some public good).
The key part of Mozilla's arrangement is that the Foundation is the sole shareholder of the Corporation; the employees don't get any shares to sell off in some kind of IPO (though they'd make a ton of money doing so). This allows it to generate revenue easily through the Corporation, but requires that this revenue must then be used for non-profit purposes (i.e. supporting the project and the internet). The whole thing is kind of an "organizational hack", but it works.
I haven't personally observed any real changes in their overall mission since this change; it was mostly a change on paper. The increase in revenue, though, has been very fruitful to the project. They started with just 10 employees; now they're past 100. They have a whole QA team and are creating several automated test frameworks and test suites (much of the code had gone without tests since the start of the Mozilla project). The whole build and release process is being automated, resulted in much faster releases of security fixes. And so on.
Mozilla Foundation stopped supporting Thunderbird development apparently because the organization got no money for it
Not true. I got the impression it was more of pragmatic decision: FF is the application that is making the big impact on the web. With its ~15% and growing market share, it is causing web designers to write standards-compliant sites. This in turn makes life easier for Opera, Safari/KHTML, and any other standards-compliant browser without the market share to get designers to care if their sites are compatible with it. The success of Firefox allows Mozilla to effectively push for new web standards and so enable the next generation of web applications (like the new <video> tag). Remember that MS only restarted work on IE because it started losing market share, largely to FF. It only makes sense for an organization to focus its resources on where they make the most difference.
FF has generated lots of excitement from users and developers, resulting in lots of extensions and web apps being written for it; the same hasn't happened with Thunderbird (TB). It could be that TB, as it exists now, isn't the right solution for managing email. The new TB org is talking about creating a unified framework for all communication, managing IM with email with social networking sites together. That might be a better approach.
Also, the work on TB was largely orthogonal to work on FF, upon which the Mozilla Corp. had come to focus on, so it made sense spin it off into a separate organization; this gives TB more independence and control over itself. I don't know why this wasn't mentioned more, but Mozilla gave the new TB organization $3 million in seed money--more than the Mozilla Foundation itself started out with--and says it may give more later if the organization can't find alternative revenue sources.
See this FAQ for more info on the split. For more information on what is actually going on in the new mail organization, read this blog post. Basically, they are now trying to hire developers and figure out the best plan to move ahead.
A while ago, people also got angry at Mozilla for no longer supporting the App Suite. Well, Suite supporters continued work on it through their own community project called SeaMonkey (with the Mozilla Corp. still hosting the project). They've since completed significant code rewrites that many thought would be impossible, and are getting ready for an ambitious v2.0 release. The Suite is being better taken care of than before, and that's without any funding.
and Google wants you to use web mail, so that you will see the ads.
Google had no say in the matter. See this blog post for a debunking of a CNET article similar to the one mentioned by the poster. If Google were to stop supporting FF, I imagine Mozilla could just as easily make a similar deal with another search engine. Even if Mozilla lost all revenue sources, its reserves of $70 million (at the end of 2006) means it could operate as is for a while; that gives it independence. With the millions likely to keep coming in for some time to come, I wonder if they might set up some kind of endowment.
"Profit" (or, change in net assets, since it's a non-profit): $27,893,735
According to Mitchell Baker (Mozilla CEO), salaries accounted for 70% of their expenses in 2006, so that's around $14 million. Net assets increased "only" by around $22 million (lower than the $28 million you calculated, perhaps because the Mozilla Corporation has to pay taxes).
Damn, it's good to be free. You'd think that the foundation would donate its money to fund other OSS projects, but as software people have discovered, the first priority of a foundation is to ensure the existence (and a lucrative existence at that) of its staff.
According to the numbers above, Mozilla employees could raise their salaries to 250% of what they now receive and still break even, but they chose not to. They could have made way more money by selling shares in the Mozilla Corp., instead of having it be fully owned by the non-profit Mozilla Foundation, but they didn't.
See this summary of Mozilla grants for 2006. Near the end:
It's too early to tell how much we'll spend in total, but I suspect we'll easily double the amount spent in 2006. As we move into 2008 we'll also be funding projects in more areas.
I get the impression they've gone slow at first to "test the waters" and find the best way to spend their money. They're even looking for help in giving away more:
The other constant is the importance of having people who can help us put together a funding program in particular areas, as Aaron Leventhal has done for Mozilla accessibility. To repeat what I wrote last year:
We're looking for more people like Aaron to whom we can successfully delegate responsibility for suggesting and overseeing grants in their area(s) of expertise. If you're one of those people I'm interested in hearing from you.
Mozilla is working right alongside Opera, Apple, and others to advance web standards in the WHATWG and W3C. Mozilla funds work on web standards (test cases, conformance checkers, etc.), works hard to implement these standards, and even tries to bring useful features of their own platform (such as XBL and the XUL box model) into web standards so the whole web can benefit--even if it means diminishing any comparative advantage of FF over other browsers. Mozilla is working to keep the web platform viable and open in light of competition from Silverlight, Apollo, and others.
Having followed Mozilla very closely for the past several years, I can tell you that these people are not in it for the money; they are religiously devoted to the idea of advancing the Open Web for the pub
Everyone I know using Firefox on the Mac has the same problem. Reproducible? Perhaps the foundation could just buy a Mac for testing.
Actually, many Firefox devs now use Macs as their primary desktops.
That is with the most recent FF, 2.0.0.9
That's the problem. FF2 is based on Gecko 1.8.1, which is now over 2 years old. FF3 (the first beta should be out in a few weeks) will be based on Gecko 1.9, which will have a mind-bogglingly large number of refactorings and core fixes (literally, several thousand bug fixes/enhancements and several millions of lines of code changed). The Mac graphics code now uses Cocoa widgets on top of Quartz (through Cairo) as opposed to Carbon widgets on top of Quickdraw; there's a new Mac theme, and HTML forms are now rendered as native widgets. The result is that FF3 now looks and feels like a native Mac app. Oh, and Linux support will see many improvements in FF3; see this blog post for details, and this one for information on what needs to happen next.
As for memory use, Gecko 1.9 has seen a lot of memory-related work, including a cycle collector for XPCOM (their COM system). Memory leaks seem to be way down. One dev thinks some memory problems might not be due to leaks but rather memory fragmentation. Planned for the big Mozilla 2 rewrite (to be in FF4 or later) is the whole new Tamarin VM (based on that big contribution from Adobe), which will perform garbage collection on the entire codebase.
For now, though: Often memory leaks are caused not by FF itself but by extensions; try running through a typical browsing session in Safe Mode and see how the memory usage compares.
Also, I'm sure you've seen the (several year old now) browser speed tests that showed FireFox to be slower than Mozilla at just about everything.
In the Conclusions section of that site, it links to an email discussion in which they point out that the reason for this was a difference in versions of the underlying rendering engine, Gecko (1.7 vs 1.8). For a meaningful comparison, you'd have to compare a version of the Suite to a version of FF with the same Gecko version underneath.
Mozilla is working on an automated performance testing framework, Talos, as well as a suite of JavaScript performance tests; it will be interesting to see some hard numbers comparing the performance of different versions of FF as well as different apps.
Slashdot Mirror
If you read the replies, both in the comments and in the follow-up blog posts, pretty much everyone disagreed with this guy. Open source communities put ideals first. Also, in one of the follow-ups, he mentions that someone wrote to him explaining that, legally, a non-profit can't use its assets (i.e. the Corp) for-profit purposes. The Moz Corp is that its entirely owned by the Foundation, just like a piece of furniture, and thus the non-profit Foundation makes calls the shots.
I've answered your other questions already; reread what I wrote. If you have more detailed legal questions, just email the Foundation directly. I guess in the end we'll just have to wait and see what they do with their money; that's the only way to know for sure.
Every time Mozilla wanted to work on some project with a corporation (like the arrangements with their default search engines or the creation of customized partner builds for eBay and others), they had to consult lawyers to find out if it was legal.
Oversight for a non-profit is a good thing.
The lawyers were there to help navigate ambiguous federal laws. They weren't there to advise on being true to the morals and "spirit" of open source, nor would they be qualified to do so. Still, Mozilla's financial statements (both the Foundation's and the Corp's) are audited and available online.
But besides that, I don't see how using the Mozilla Corporation as a proxy is any different from working with a 3rd party corporation. Either way a business deal is going on with a corporation.
Apart from the legal issues, there really isn't any difference. What exactly is the problem with doing business with a corporation? What business deals have they done that you object to?
The key part of Mozilla's arrangement is that the Foundation is the sole shareholder of the Corporation; the employees don't get any shares to sell off in some kind of IPO (though they'd make a ton of money doing so). This allows it to generate revenue easily through the Corporation, but requires that this revenue must then be used for non-profit purposes (i.e. supporting the project and the internet).
How is this requirement enforced? If the for-profit wanted to spend $10 million as salaried compensation for its top brass, what would prevent them from doing so? They wouldn't even have to report it publically, since they aren't a public corporation.
I don't know what non-profit and tax law requires, but I'd believe the Foundation would be restricted in the use of its assets (which includes the Corp.) in the same way as for any other non-profit. The salaries of the Corp.'s officers are reported in their tax statement, available online. The Foundation's Board of Trustees certainly wouldn't approve of any money-making scams, and neither would the Mozilla community, whose support and help the Foundation & Corp. depend on. That's a much more effective safeguard than tax law.
But tell me, if this was their plan all along, why haven't they done something like this already? There's more than enough available funds to more than double their salaries, instead of hiring more developers and funding more projects.
Didn't they already have this revenue before the for-profit? Didn't they already spend money on developers, QA, etc?
Yes, but not as much. That's the point. Don't you think a ten-fold increase in staff size is significant? They now have whole teams devoted to many areas rather than a single person. Even some bugs from 1999 are getting fixed.
From what I can tell, the Mozilla Foundation grew Firefox with goodwill, donations, and other community support under the heading of a non-profit. They then received a $50+ million yearly windfall from Google. They transferred this windfall from a non-profit to a for-profit in a shell game in which they have complete freedom to do with the money as they wish, with no accountability to the public, and the community is expected to believe that everything will be on the up-and-up.
First, the part about being free to do whatever they want with the money and not be accountable is false, as I've said. And in fairness, the Mozilla Corp. does do the majority of the work on Firefox, not to mention hosting all the project infrastructure and lots of community projects.
It's interesting that the Mozilla community isn't making the big accusations of corruption and control by Google; it's those outside-looking-in that are. The Mozilla community has complained of putting too much focus on Firefox and not more on Thunderbird and, much more importantly, XUL Runner, and of poor communication at times, but not of c
Basically, by law non-profits are restricted in the kind of activities they can perform, particularly in generating revenue. Every time Mozilla wanted to work on some project with a corporation (like the arrangements with their default search engines or the creation of customized partner builds for eBay and others), they had to consult lawyers to find out if it was legal. By performing most of their activities under a corporation, all this legal uncertainty, expense, and restrictions could be avoided. The downside to this was that they had to start paying taxes, but that can be considered a good thing in that it supports society.
I don't even understand how a non-profit can own a for-profit. It just doesn't make any sense to me.IANAL, but I don't think it's much different than how a university might own an endowment, which consists of stock in various for-profit corporations. What makes something a non-profit is not what it owns but what it uses its assets for (generating revenue vs. furthering some public good).
The key part of Mozilla's arrangement is that the Foundation is the sole shareholder of the Corporation; the employees don't get any shares to sell off in some kind of IPO (though they'd make a ton of money doing so). This allows it to generate revenue easily through the Corporation, but requires that this revenue must then be used for non-profit purposes (i.e. supporting the project and the internet). The whole thing is kind of an "organizational hack", but it works.
I haven't personally observed any real changes in their overall mission since this change; it was mostly a change on paper. The increase in revenue, though, has been very fruitful to the project. They started with just 10 employees; now they're past 100. They have a whole QA team and are creating several automated test frameworks and test suites (much of the code had gone without tests since the start of the Mozilla project). The whole build and release process is being automated, resulted in much faster releases of security fixes. And so on.
See this blog post by Mitchell Baker and this official FAQ on the reorganization for more details.
Oh, and they just came out with their 2007 grant figures for those interested.
Not true. I got the impression it was more of pragmatic decision: FF is the application that is making the big impact on the web. With its ~15% and growing market share, it is causing web designers to write standards-compliant sites. This in turn makes life easier for Opera, Safari/KHTML, and any other standards-compliant browser without the market share to get designers to care if their sites are compatible with it. The success of Firefox allows Mozilla to effectively push for new web standards and so enable the next generation of web applications (like the new <video> tag). Remember that MS only restarted work on IE because it started losing market share, largely to FF. It only makes sense for an organization to focus its resources on where they make the most difference.
FF has generated lots of excitement from users and developers, resulting in lots of extensions and web apps being written for it; the same hasn't happened with Thunderbird (TB). It could be that TB, as it exists now, isn't the right solution for managing email. The new TB org is talking about creating a unified framework for all communication, managing IM with email with social networking sites together. That might be a better approach.
Also, the work on TB was largely orthogonal to work on FF, upon which the Mozilla Corp. had come to focus on, so it made sense spin it off into a separate organization; this gives TB more independence and control over itself. I don't know why this wasn't mentioned more, but Mozilla gave the new TB organization $3 million in seed money--more than the Mozilla Foundation itself started out with--and says it may give more later if the organization can't find alternative revenue sources.
See this FAQ for more info on the split. For more information on what is actually going on in the new mail organization, read this blog post. Basically, they are now trying to hire developers and figure out the best plan to move ahead.
A while ago, people also got angry at Mozilla for no longer supporting the App Suite. Well, Suite supporters continued work on it through their own community project called SeaMonkey (with the Mozilla Corp. still hosting the project). They've since completed significant code rewrites that many thought would be impossible, and are getting ready for an ambitious v2.0 release. The Suite is being better taken care of than before, and that's without any funding.
and Google wants you to use web mail, so that you will see the ads.Google had no say in the matter. See this blog post for a debunking of a CNET article similar to the one mentioned by the poster. If Google were to stop supporting FF, I imagine Mozilla could just as easily make a similar deal with another search engine. Even if Mozilla lost all revenue sources, its reserves of $70 million (at the end of 2006) means it could operate as is for a while; that gives it independence. With the millions likely to keep coming in for some time to come, I wonder if they might set up some kind of endowment.
Revenues: $66,840,850
Expenses: $19,776,193
"Profit" (or, change in net assets, since it's a non-profit): $27,893,735
According to Mitchell Baker (Mozilla CEO), salaries accounted for 70% of their expenses in 2006, so that's around $14 million. Net assets increased "only" by around $22 million (lower than the $28 million you calculated, perhaps because the Mozilla Corporation has to pay taxes).
Damn, it's good to be free. You'd think that the foundation would donate its money to fund other OSS projects, but as software people have discovered, the first priority of a foundation is to ensure the existence (and a lucrative existence at that) of its staff.
According to the numbers above, Mozilla employees could raise their salaries to 250% of what they now receive and still break even, but they chose not to. They could have made way more money by selling shares in the Mozilla Corp., instead of having it be fully owned by the non-profit Mozilla Foundation, but they didn't.
See this summary of Mozilla grants for 2006. Near the end:
It's too early to tell how much we'll spend in total, but I suspect we'll easily double the amount spent in 2006. As we move into 2008 we'll also be funding projects in more areas.
I get the impression they've gone slow at first to "test the waters" and find the best way to spend their money. They're even looking for help in giving away more:
The other constant is the importance of having people who can help us put together a funding program in particular areas, as Aaron Leventhal has done for Mozilla accessibility. To repeat what I wrote last year:
We're looking for more people like Aaron to whom we can successfully delegate responsibility for suggesting and overseeing grants in their area(s) of expertise. If you're one of those people I'm interested in hearing from you.
They've been funding lots of accessibility work, whereas many for-profits ignore disabled users entirely. They've sponsored conferences on using the internet for the public good. They also sponsor projects that are not part of FF and its revenue stream: work on Linux desktop accessibility, Creative Commons and the Participatory Culture Foundation, buying commercial javascript code and releasing it as open source, Apache and OpenSSL, and just now Perl 6.
Mozilla is working right alongside Opera, Apple, and others to advance web standards in the WHATWG and W3C. Mozilla funds work on web standards (test cases, conformance checkers, etc.), works hard to implement these standards, and even tries to bring useful features of their own platform (such as XBL and the XUL box model) into web standards so the whole web can benefit--even if it means diminishing any comparative advantage of FF over other browsers. Mozilla is working to keep the web platform viable and open in light of competition from Silverlight, Apollo, and others.
Having followed Mozilla very closely for the past several years, I can tell you that these people are not in it for the money; they are religiously devoted to the idea of advancing the Open Web for the pub
Actually, many Firefox devs now use Macs as their primary desktops.
That is with the most recent FF, 2.0.0.9That's the problem. FF2 is based on Gecko 1.8.1, which is now over 2 years old. FF3 (the first beta should be out in a few weeks) will be based on Gecko 1.9, which will have a mind-bogglingly large number of refactorings and core fixes (literally, several thousand bug fixes/enhancements and several millions of lines of code changed). The Mac graphics code now uses Cocoa widgets on top of Quartz (through Cairo) as opposed to Carbon widgets on top of Quickdraw; there's a new Mac theme, and HTML forms are now rendered as native widgets. The result is that FF3 now looks and feels like a native Mac app. Oh, and Linux support will see many improvements in FF3; see this blog post for details, and this one for information on what needs to happen next.
As for memory use, Gecko 1.9 has seen a lot of memory-related work, including a cycle collector for XPCOM (their COM system). Memory leaks seem to be way down. One dev thinks some memory problems might not be due to leaks but rather memory fragmentation. Planned for the big Mozilla 2 rewrite (to be in FF4 or later) is the whole new Tamarin VM (based on that big contribution from Adobe), which will perform garbage collection on the entire codebase.
For now, though: Often memory leaks are caused not by FF itself but by extensions; try running through a typical browsing session in Safe Mode and see how the memory usage compares.
In the Conclusions section of that site, it links to an email discussion in which they point out that the reason for this was a difference in versions of the underlying rendering engine, Gecko (1.7 vs 1.8). For a meaningful comparison, you'd have to compare a version of the Suite to a version of FF with the same Gecko version underneath.
Mozilla is working on an automated performance testing framework, Talos, as well as a suite of JavaScript performance tests; it will be interesting to see some hard numbers comparing the performance of different versions of FF as well as different apps.