Mozilla's revenue rose 8% to $562M in 2017, boosted by an expanded Google-Firefox deal for default search, but Firefox MAUs dipped YoY from 300M to 277M
The State of Mozilla 2017 is our annual report. The Mozilla Blog : State of Mozilla 2017: Annual Report Thanks: @rogerwcheng
Context & Ripple Effects
Mozilla's annual reports have traced a steep but decelerating curve: $329M in 2014 with 90% of it from Google and Yahoo (per its 2014 annual report), then a jump to $421M in the first full year of the Yahoo search deal, and $520M in 2016, up 24% YoY. The 2017 figure of $562M extends the streak but at half that growth rate.
The new wrinkle is that this year's 8% gain came alongside an expanded Google-Firefox default-search deal while Firefox's monthly active base shrank from 300M to 277M — meaning more money is being extracted per remaining user, almost entirely through search placement.
First-order effects
- Google's expanded default-search agreement directly replaces search-deal income Mozilla had been splitting with Yahoo since 2015, and it is what carries the year's revenue growth despite the shrinking browser base.
Second-order effects
- With Firefox MAUs down 23M YoY, Mozilla's economics tilt further toward monetizing fewer users harder — raising the effective price Google pays per Firefox user and making each future renewal negotiation more consequential for Mozilla's budget.
Third-order effects
- If the pattern holds — search deals funding a nonprofit whose distribution channel keeps contracting — Mozilla's independence increasingly depends on renegotiation leverage it does not control, concentrating single-searcher dependency that was already 90% of revenue back in 2014.
The trend: Browser makers are becoming search-placement businesses: revenue grows on deal terms even as the underlying user base erodes.