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Mozilla's search revenue jumps 31%, likely due to nearly $1B Google deal

Browser maker may be banking an extra $16.4M each month from 2011's three-year agreement

By Gregg Keizer, Computerworld
November 16, 2012 07:45 AM ET

Computerworld - Mozilla today said that income from search partners climbed 31% last year, hinting at the reportedly lucrative deal the open-source foundation struck with fierce browser rival Google.

Retro browser smackdown

Royalties, almost all of which come from search services like Google, Microsoft, Yahoo and others, were $161.9 million, up by nearly a third from 2010's $123.2 million.

Nearly all the Mozilla Foundation's 2011 revenue came from search providers, which paid the organization for leading Firefox users to their websites. In 2011, royalty payments accounted for 99% of the year's income, slightly lower than the share of Mozilla's revenue attributed to search in the last three years, when losses in other areas, such as the organization's investments or currency exchanges, pushed total income below that of royalties.

Mozilla Foundation is the not-for-profit organization that oversees Mozilla Corp., the commercial firm that develops Firefox for desktop and notebook PCs and Macs, and Android smartphones.

According to the audited financial statement ( download PDF) released Thursday, total revenues for 2011 were $163.5 million, up 35% from 2010's $121.1 million.

Mozilla no longer discloses the amounts it received from each search partner. But in an FAQ also published today, the organization said: "The majority of Mozilla's revenue is generated from search and commerce functionality included in our Firefox product through all major search partners including Google, Bing, Yahoo, Yandex, Amazon, eBay and others."

That was virtually a word-for-word repeat of the phrasing it has used for the last two years.

Historically, Google has accounted for most of Mozilla's search royalties; in 2008, the last year Mozilla split each partner's revenue contribution, Google's payments made up 88% of the total.

Last year's dramatic boost to royalty income -- 31.4% over the year before -- was a significant uptick from past years' increases. The average annual increase during the five-year period from 2006-2010 was 19.6%, just over half that of last year.

Although the boost could have been due to more Firefox users, it seems unlikely, as the browser's share of the global market has slipped 16% in the last 12 months, according to Web metrics firm Net Applications.

Another possibility: The three-year search agreement that Mozilla and Google signed late last year.

According to reports, the new deal required Google to pay Mozilla almost $300 million annually to keep its search engine the default in Firefox.

Mozilla's revenue from its search deals -- primarily the one with Google -- jumped 31% in 2011 to about $162 million. (Date: Mozilla Foundation.)

The two companies acknowledged the new contract in late December 2011; both declined to comment on the specifics of the deal, or confirm the $300 million annual payment.

If the agreement was dated retroactively to the November expiration of the previous contract -- Mozilla never dropped Google as Firefox's default during the interval between the end of the earlier contract and the announcement of the renewal -- the new deal could have accounted for the bulk of the royalty revenue increase.

Originally published on www.computerworld.com. Click here to read the original story.

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