Mozilla not interested in building a Firefox OS

Google wants to catalyze the era of Web applications with its Chrome OS project, but Mozilla has no plans for its own browser-based operating system, at least for now.

"We're really focused on making the Web the right platform of whatever operating system one is using. That's a fair amount of work," Mozilla Foundation Chairman Mitchell Baker said. "I think we're going to continue to focus for quite awhile on the Web itself as a platform and the capabilities of the Web rather than build an operating system of our own and pull everybody into our world."

Baker shared the thoughts in an interview about the Mozilla Foundation's report of $79 million in 2008 revenue. The foundation isn't strapped for cash, but it is financially tiny compared to the three main rivals in the browser market today, Microsoft, Apple, and Google.

Microsoft was largely dormant when Firefox was getting its start five years ago, but the company is lighting a fire under its Internet Explorer developers for IE 9. Among the features the company touted are faster execution of Web-based JavaScript programs, better compliance with Web standards, and higher performance in general.

Internet Explorer remains the dominant browser in use today. Today, the elderly IE 6, dating from 2001, still is the most widely used version, and its widespread use is an anchor that keeps Web developers and therefore other browsers from advancing as fast as they might. So, unsurprisingly, Baker was comfortable with the prospect of a higher-powered IE being resurgent.

"If it could resurge enough to pull the hundreds of millions of people still using IE 6, we'd all be ecstatic," she said. "A lot of people are going to continue to use IE. They get it on their machine. If Microsoft makes that product more capable so the Web can move forward, there's good in that."

The Mozilla Foundation, of which Firefox developer Mozilla Corp. is a taxable subsidiary, gets the bulk of its revenue from Google through a search-ad deal that runs through 2011 at present. Search traffic that stems from Firefox's built-in search bar is set by default to go to Google, and a portion of the resulting Google search-ad revenue goes back to Mozilla.

Mozilla is looking to diversify its revenue sources, though, Baker said, and has taken some small steps.

"We did some small diversification in search, for example in Russia," using Google rival Yandex's services, she said. "We look at diversification, but we're not rushing into it."

And she's comfortable with today's funding situation because it doesn't force Mozilla to take Firefox in a direction it doesn't want to go.

"We have search in the product because we want it. We don't have any other discussions with Google about what the product is," she said. "The search and revenue relationship is completely distinct from the product development relationship."

Though Mozilla's revenue grew only at 5 percent from 2007 to 2008, compared to 12 percent the year before, Baker isn't concerned. "It matches our projections" of slow, steady growth, she said. "We're pretty much in line."

Digging into the financial statement, it should be noted that the foundation's $79 million in revenue is after a $7.8 million unrealized loss in the value of its investments. As the economy improves, it's possible those investments will recover some of their value.

The foundation is making more money than it loses. Expenses were $49 million for 2008, according to the financial statement.

"We have adequate resources to do what we have planned, plus save a little bit," Baker said. "Right now we're not bumping up against the ceiling. Our revenue is adequate to meet our needs. We try to be careful with money."

The Internal Revenue Service is scrutinizing Mozilla's corporate structure--a foundation with two taxable if not exactly for-profit subsidiaries. The foundation disclosed the scrutiny a year ago, and that investigation is continuing, Baker said.

"The IRS can be a very slow-moving organization. It's still an open discussion," she said, and the foundation is taking the matter seriously. "We don't have a clear idea what the IRS is thinking."

Two years ago, the Mozilla Foundation established its second taxable subsidiary, Mozilla Messaging, which focuses on the Thunderbird e-mail software and more recently on the Web-based Raindrop universal communications service. For now, that project gets its funding from the Firefox side of the house, but Baker plans to increase its financial focus once the near-final Thunderbird 3 is finished.

"The task now is to ship first Thunderbird 3. We expect to see that this year," Baker said. Mozilla overall is set up to be sustainable, not to be a money machine, but Mozilla Messaging will need to generate more revenue on its own eventually to help with that sustainability effort.