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Mozilla Foundation makes commercial move

Firefox developer is creating a for-profit subsidiary to pursue wider potential for the software.

The Mozilla Foundation announced on Wednesday that it's creating a commercial subsidiary responsible for the development, testing and distribution of the organization's open-source products.

The body, called the Mozilla Corporation, is wholly owned by the Mozilla Foundation and will plough all its revenue back into the foundation. Mitchell Baker, president of the Mozilla Corporation, said the foundation decided to create a commercial subsidiary, as its commercial activities were restricted through being a nonprofit organization.

"It is difficult to determine what ways of generating revenue make sense for a nonprofit and which ways of generating revenue are not appropriate," Baker wrote in her blog. "The Mozilla Corporation has been created to address this. The Mozilla Corporation is a taxable entity and so is legally permitted greater freedom of action (than) the Mozilla Foundation."

The corporation will develop and deliver Mozilla's open-source products, such as the Firefox browser and the Thunderbird e-mail client, including working on marketing and sponsorship activities. The foundation will mostly focus on community-related activities, including formalizing the governance structures of the open-source project.

The corporation, which will begin operations immediately, will not offer stock options to its employees and will not consider a public stock offering, according to information on the Mozilla Web site. Thirty-six of the organization's employees will be transferred to the commercial arm, while three employees will continue to work for the foundation.

Ingrid Marson reported for ZDNet UK.