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Thanks, Google: Mozilla revenue hits $75 million

In its 2007 annual report, the Firefox backer reports a 12 percent increase in revenue, most from Google. It also discloses IRS scrutiny.

The Mozilla Foundation pulled in $75 million in revenue in 2007, the "vast majority" of it from a search partnership with Google, the Firefox backer plans to announce Wednesday.

"Mozilla is well positioned to remain vital and effective during the current difficult economic times," according to Mozilla Chairman Mitchell Baker in a blog post about the foundation's 2007 results. The revenue includes that of both the foundation and its for-profit subsidiary, Mozilla Corp., that's focused on developing Firefox and related open-source browser technology.

Mozilla Foundation Chairman Mitchell Baker
Mozilla Foundation Chairman Mitchell Baker Mozilla

The revenue increased about 12 percent from 2006, when Mozilla garnered $66.8 million in revenue. Its 2007 expenses were $33 million, a 68 percent increase over 2006. About 80 percent of that money was spent on Mozilla's 150 employees.

However, the foundation also said the U.S. Internal Revenue Service is scrutinizing how the foundation treated the revenue it received from Google. Baker put it this way:

In 2005 the Mozilla Foundation established a "tax reserve fund" for a portion of the revenue the foundation received that year from Google. We did this in case the IRS decided to review the tax status of these funds. This turns out to have been beneficial, as the IRS has decided to review this issue and the Mozilla Foundation. We are early in the process and do not yet have a good feel for how long this will take or the overall scope of what will be involved.

Mozilla features Google prominently in two ways: a default start page with a Google search box, and a search bar in the upper right corner of the Firefox interface. Users can configure the search bar to use search from a variety of others, too. Baker said Yahoo and provided a smaller quantity of extra revenue, but Google accounted for 88 percent of the foundation's money.

Mozilla renewed its search partnership with Google through 2011 in August, just a week before Google announced its own open-source Web browser, Chrome.

In an interview, Baker said Mozilla is watching Chrome but isn't particularly worried. The search partnership is analogous to Google's AdSense program, in which Web sites show Google advertisements and share the resulting revenue with Google, and Google has many such partnerships. And, she added, "Our market share continues to grow, and we expect it to be healthy."