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Google-Firefox search deal gives Mozilla more money to push privacy

Too bad fewer people are using Mozilla's web browser.

Mozilla headquarters in Mountain View, California.

Mozilla headquarters in Mountain View, California.

Stephen Shankland/CNET

An expanded Firefox search deal with Google helped push Mozilla's annual revenue up 8 percent to $562 million for 2017 -- money that should come in handy as the nonprofit tries to salvage what's good about the internet.

Facebook's Cambridge Analytica privacy scandal and Russian election meddling have led plenty of people to question whether today's tech is actually a net benefit for society. But Mozilla was founded to tackle those kinds of internet health issues.

"Privacy and security have been brought to the mainstream. We love that we can talk about these issues in a way that's creating a lot more knowledge and understanding for the consumer," said Chief Operating Officer Denelle Dixon.

Mozilla is using not just the Firefox web browser but increasingly other products, services and campaigns to try to help us online. "That's our focus as we enter into in 2019," she said.

Too bad Mozilla is arguably losing leverage just when we could use it the most.

Over the last year, the number of people using Firefox monthly has dipped from about 300 million to about 277 million, according to Mozilla's own figures. Mozilla offers more technology than Firefox, but the browser is its best-known brand, most widely used product, and a key tool to get people to try things like Mozilla's VPN service for network privacy, Lockbox tool for password management, and the Firefox Monitor tool to warn if you were affected by a data breach.

And Firefox trails Google's Chrome and Apple's Safari, too. Firefox usage slipped over the last year from 6 percent to 5 percent, according to analytics firm StatCounter, which measures how often browsers are used to view websites among its network. That's third place to Google's dominant Chrome browser at 62 percent and Apple's Safari at 15 percent.

Firefox doesn't need to dominate the internet. But it does need a strong enough presence to influence the development of standards so the web remains an openly developed platform, not just whatever works with Chrome.

Firefox-generated search revenue

The lion's share of Mozilla's revenue -- $542 million, according to the 2017 tax reports it released Tuesday -- comes from deals that send our queries in Firefox to search engines such as Google, Yandex and Baidu. An earlier deal with Yahoo ended in an as-yet unresolved lawsuit with its owner, Verizon. Mozilla is paid in proportion to the search traffic it sends to search sites, which make money by sometimes showing search ads alongside search results.

Mozilla's 2017 revenue increased 8 percent to $562 million.

Mozilla's 2017 revenue increased 8 percent to $562 million.

Stephen Shankland/CNET

Some of the increase in Mozilla's 2017 revenue came because Mozilla signed a deal to get paid for Google search traffic in parts of Europe, Dixon said. "We generate a significant amount of revenue from outside the US," she said, including from non-Google partners.

She declined to comment in detail on the Verizon lawsuit, which is in a preliminary data-discovery phase.

"We feel very good about our revenue from existing partners. We have anticipated not receiving any additional revenue from Yahoo as the litigation is pending," Dixon said.

Mozilla has taken on Facebook, pulling its advertisements and offering a Firefox plugin that makes it harder for Facebook to track you online. But Mozilla's search partners aren't free from criticism, either, whether it's Google tracking you online or wrestling with the idea of censored search results in China. Of course, you can always search in Firefox's private-tab mode, which makes it harder for Google to profile you based on your search history.

More marketing money

Mozilla's revenue increased from 2016 to 2017, but so did its expenses, including $30 million more spent on software projects and $18 million on marketing -- mostly the new Firefox Quantum version that's spearheading Mozilla's attempt to reverse its market declines.

Also in 2017, Mozilla paid $2.3 million to its chair, Mitchell Baker, a key executive since Mozilla's early days. Mozilla's total expenses increased from $361 million to $422 million.

Mozilla is branching out beyond Firefox, though only modestly at this stage. One example is its 2017 acquisition of Pocket, a service that lets you bookmark websites, save them for online or offline reading at your convenience, and more recently convert them into spoken words with AI text-to-speech technology. Pocket feeds recommendations -- including sponsored posts -- into the new-tab page in Firefox.

You can also subscribe to Pocket for ad-free usage. Mozilla garnered nearly $3 million in revenue from Pocket, Dixon said. Mozilla also disclosed that it paid $25 million in cash for Pocket plus $5 million in deferred payments. It might not be the last time Mozilla decides to expand through an acquisition, too.

"We're constantly evaluating our options in building, buying and partnerships," Dixon said. "I would hope to say Pocket is not our last acquisition."

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