Firefox, Mozilla & New Business Models

Since its official release in 2004 the Firefox browser, open source brainchild of the non-profit Mozilla Foundation, has spread with astonishing speed, generating about 75 million downloads and amassing a market share approaching 10 percent. This week the Foundation said it is forming a for-profit subsidiary to make ot easier for this loosey-goosey operation to do business with straight-laced corporations. In so doing, Mozilla has launched an experiment at the intersection of the non-profit and for-profit worlds.

Official word of the change came in the August 3rd issue of mozillaZine, along with this assurance: “While the Mozilla Corporation will be a for-profit, the Mozilla Foundation is keen to stress that it is not selling out. The Mozilla Foundation will ultimately control the activities of the Mozilla Corporation and will retain its 100 percent ownership of the new subsidiary. Any profits made by the Mozilla Corporation will be invested back into the Mozilla project. There will be no shareholders, no stock options will be issued and no dividends will be paid. The Mozilla Corporation will not be floating on the stock market and it will be impossible for any company to take over or buy a stake in the subsidiary.”

The philosphical underpinnings of the move are best explained by new Mozilla Corporation president Mitchell Baker, formerly the “chief lizard wrangler” in the pre-incorporated order. As Mitchell wrote in her blog: “Non-profit law is reasonably well understood for traditional non-profit organizations like museums, universities and the traditional style of charities. But organizations like the Mozilla Foundation, which develops and distributes consumer software, are new in the non-profit world and the application of nonprofit laws to their activities is a developing area. We’ve found that this uncertainty makes responding to Mozilla Firefox’s success very complex. It is difficult to know what relationships with commercial organizations make sense for a non-profit or how to structure them. It is difficult to know what activities the non-profit should and shouldn’t engage in.”

In retrospect, Mitchell telegraphed the move in a June 1 posting entitled Technology and Nonprofits that contained these hints: “I had lunch yesterday with Jim Fruchterman. Jim leads the BeneTech Initiative, a non-profit high-technology organization dedicated to building sustainable technology initiatives that address social problems … Talking with Jim is always great. He’s got great experience with the organizational issues that affect a non-profit. … Jim is also experimenting with different ways of generating funds to sustain these technological projects since traditional models don’t fit. And of course he’s thinking about how to generate funds and remain true to the mission of the project.”

Reporter Michael Bazeley wrote a thorough news account of the change for the Mercury News and John Paczkowski added some background on his Good Morning Silicon Valley blog.

I would add just two thoughts.

First, it would be naive not to mention that Mozilla has powerful corporate friends. Would AOL or Google shed a single lizard tear if this cool-and-groovy-browser caused further aggravation for that outfit up in Redmond? How, or whether, such considerations played into the Mozilla reorg I cannot say but the competition between Mozilla and the monopolist — and the certainty that there is a corporate peanut gallery cheering on the rebel browser — must be acknowkledged.

Second, and without any cynicism, I am hopeful that the reincarnated lizard will teach us all new tricks about doing business in this Internet age. There is no activity that is more useful, satisfying and creative than bringing people and resources together to build a company. But many people have a negative image of business because they equate it with Big Business and strip-mining and all sorts of excess. If we can create businesses that are large and global without being rapacious, what a thing that would be!

Finally, I’ve just gotta blog this ’cause if you don’t blog something like this, why bother blogging. A few months back, while teaching a feature writing course, one student proposed a story (alas not finished in the class) about the software maven at an Internet browser startup whose hobby was performing aerial leaps of the sort that circus performers do. In the months to come we shall all see if Mitchell Baker can truly fly through the air with the greatest of ease.

Tom Abate
‘Cause if you ain’t Mass Media, you’re Mini Media