How Mozilla Makes Money and Why It Had Better Start Exploring Other Options.

A post on ZDNet today took me back to when I first considered how web browsers like Firefox made their money.

Many believe that Mozilla, known generally as an “open source” alternative to the likes of Internet Explorer, survives and thrives off donations. That is not the case. While the Mozilla Foundation does accept donations, Firefox , Thunderbird, Seamonkey and it’s other products are part of The Mozilla Corporation.

The Mozilla Corporation is a wholly owned subsidiary of the Mozilla Foundation and unlike the non-profit Mozilla Foundation, the Mozilla Corporation is a taxable entity. It reinvests some or all of its profits back into the Mozilla projects. The Mozilla Corporation’s stated aim is to work towards the Mozilla Foundation’s public benefit to “promote choice and innovation on the Internet.

So how does it make money. In one word, Google. Mozilla makes money by partnering with the likes of Google who pay Mozilla a publicly undisclosed amount for each Google search query made from Firefox by a user, reportedly between $50 to $100 million a year.

Hence why you’ll find Google as Firefox’s default search engine on its default homepage, and top right search bar.

Mozilla’s predecessor, Netscape, was also available for free but did not have the benefit (at the time) of a paying search partnership.

It’s unclear whether Mozilla has another revenue-generating option from within the browser itself, but what is for certain is that according to audited PDF of Mozilla’s financial results approximately 91% and 94% of Mozilla’s revenue for 2008 and 2007, respectively, came from Google.

With Google now promoting their own browser (and OS), Mozillaneeds to get thinking fast and exploring other revenue earning options. Of course, if Microsoft were to step in and offer Mozilla a hefty sum to replace Google as default search engine, then things might just get very interesting indeed.