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Mozilla's revenues in 2017 increased by 8% over the previous year, but spending increased twice as much, or 17%, over the same period.
Most of the $ 562 million in revenue generated by the Mozilla Foundation came from royalty payments, mostly from various transactions made for Firefox's default search engine. Mozilla Foundation is the non-profit organization that in turn manages Mozilla Corp., the commercial organization that creates and manages the Firefox browser for Windows, macOS, Linux, iOS and Android.
According to Mozilla's 2017 financial statements released on Tuesday, $ 539 million, or about 96 percent of total revenue, came from royalty payments. The percentage of revenue from royalties has never been less than 91% – Mozilla's fortune has always been tied to Firefox's search contracts – but the share of 2017 was slightly lower than in 2016.
In 2017, these research contracts accounted for 93% of all royalty revenue, said Mozilla, noting that these agreements were worth about $ 501.4 million. That was about $ 27 million more than in 2016, a relatively small increase of 6%. (Revenue from research contracts increased by 15% in 2016, for example.)
The modest increase in revenue from research contracts is notable, as it shows that the latest Mozilla provider change did not significantly increase revenues.
A year ago, Mozilla dropped Yahoo as the default Firefox browser for the US, Canada, and a few other countries. The company then reconnected with Google, its premier search provider and largest source of revenue, for years, until the organization joined Yahoo in 2014.
Last year was the first full year of last contact with Google. Neither Mozilla nor Google have disclosed the financial terms of the deal reached in 2016, but in 2017, the earnings report reported that the money was not more than a $ 40 million. a replacement to start Yahoo.
Mozilla's financial data for 2017 did not suggest that the organization had continued to receive payments from Yahoo after switching to Google. This was not a surprise: the two sued in California Superior Court at the end of last year for their contract.
The Yahoo-Mozilla agreement included an unusual clause that gave Mozilla the right to opt out if Yahoo were sold. Under this agreement, Mozilla had to be paid for the entire duration of the contract, even though he That was the one that had terminated the agreement before the expiration of 2019 – or the difference between the $ 375 million annual Yahoo and all that Mozilla has obtained from a new partner.
Verizon bought Yahoo for $ 4.5 billion in mid-2017 and then integrated it with America Online to create a new company, Oath.
Meanwhile, spending has risen faster than incomes
While Mozilla's revenue grew by 8%, spending rose 17%, more than double that rate.
Most of Mozilla's spending – 60%, down three percentage points from the previous year – was spent on software development, which reached $ 253 million, an increase of 12% and double the increase recorded in 2016. The biggest increase on the expenditure side, however, was the 39% gain on the "brands and marketing" item, which went from $ 47 million (2016) to $ 66 million dollars (2017).
Unsurprisingly, the difference between products and expenses is slightly reduced in 2017, the latter having grown faster than the first. The "profit" of Mozilla – the line "Net cash provided by operating activities" in its financial statements – rose from $ 108 million the previous year to $ 101 million in 2017, a decline of 6 %.
Nevertheless, Mozilla appeared on a solid financial ground. Its rainy day fund – total cash, cash equivalents and investments – reached $ 464 million, up $ 65 million from 2016, an increase of 16% over the previous year. ;last year. These savings could feed Mozilla at its pace of spending in 2017 for just over 13 months, even though all revenue was evaporating.
What Mozilla does not say
Despite the inclusivity implied by the title of the long blog post that accompanied the publication of the financial statements – "State of Mozilla 2017" – the organization was omitting crucial information, especially on how Firefox stood against his rivals.
Firefox's share of the desktop browser market, the only space it's competitive on, has fallen this year. Although Firefox is user share, an estimate generated by the provider of Net Applications analysis, dropped by only 1.2 percentage points in 2017 to end the year at 11%. In 2018, she dived. Since January, Firefox has lost 1.8 percentage points to close at 9.3% in October. Unless Mozilla puts an end to the downward trend, Firefox could only represent a little over 5% of all browsers in the world from here at the same time next year. .
Sharing is important for all browsers because apps generate revenue for their makers, one way or the other. The interest of Mozilla is particularly keen because other major browser developers – Google, Microsoft and Apple – are generating many revenue streams. Firefox, however, relies almost exclusively on search contracts, and these contracts depend on the browser's ability to bring users to a search site. Without a significant number of users, providers will have little reason to pay Mozilla for the default value in Firefox.
IDG / Gregg KeizerThe revenue from Mozilla's research contracts reached $ 501 million in 2017, an increase of 6%. The gains of the previous two years had been 7x and 2x those of last year.
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