September 2020

Mozilla is in an absolute state: high
overheads, falling usage of Firefox, questionable sources of revenue and
now making big cuts to engineering as their income falls.


a graph showing that executive pay has grown fast while Firefox's market share has fallen
Mozilla’s top exec pay has gone up hugely even as usage has
crashed.

Mozilla recently announced that they would be dismissing 250 people.
That’s a quarter of their workforce so there are some deep cuts to their
work too. The victims include: the MDN docs (those are the web standards
docs everyone likes better than w3schools), the Rust compiler and even some
cuts to Firefox development. Like most people I want to see Mozilla do well
but those three projects comprise pretty much what I think of as the whole
point of Mozilla, so this news is a a big let down.

The stated reason for the cuts is falling income. Mozilla largely relies
on “royalties” for funding. In return for payment, Mozilla allows big
technology companies to choose the default search engine in Firefox – the
technology companies are ultimately paying to increase the number of
searches Firefox users make with them. Mozilla haven’t been particularly
transparent about why these royalties are being reduced, except to blame
the coronavirus.

I’m sure the coronavirus is not a great help but I suspect the bigger
problem is that Firefox’s market share is now a tiny fraction of its
previous size and so the royalties will be smaller too – fewer users, so
fewer searches and therefore less money for Mozilla.

The real problem is not the royalty cuts, though. Mozilla has already
received more than enough money to set themselves up for financial
independence. Mozilla received up to half a billion dollars a year (each
year!) for many years. The real problem is that Mozilla didn’t use
that money to achieve financial independence and instead just spent it each
year, doing the organisational equivalent of living hand-to-mouth.

Despite their slightly contrived legal structure as a non-profit that
owns a for-profit, Mozilla are an NGO just like any other. In this article
I want to apply the traditional measures that are applied to other NGOs to
Mozilla in order to show what’s wrong.

These three measures are: overheads, ethics and results.

Overheads

One of the most popular and most intuitive ways to evaluate an NGO is to
judge how much of their spending is on their programme of works (or
“mission”) and how much is on other things, like administration and
fundraising. If you give money to a charity for feeding people in the third
world you hope that most of the money you give them goes on food – and not,
for example, on company cars for head office staff.

Mozilla looks bad when considered in this light. Fully 30% of all
expenditure goes on administration. Charity Navigator, an organisation that
measures NGO effectiveness, would give them
zero out of ten
on the relevant metric. For context, to achieve 5/10 on
that measure Mozilla admin would need to be under 25% of spending and, for
10/10, under 15%.

Senior executives have also done very well for themselves. Mitchell
Baker, Mozilla’s top executive, was paid $2.4m in 2018, a sum I personally
think of as instant inter-generational wealth. Payments to Baker have more
than doubled in the last five years.

As far as I can find, there is no UK-based NGO whose top executive makes
more than £1m ($1.3m) a year. The UK certainly has its fair share of big
international NGOs – many much bigger and more significant than
Mozilla.

I’m aware that
some people dislike overheads as a measure
and argue that it’s possible
for administration spending to increase effectiveness. I think it’s hard to
argue that Mozilla’s overheads are correlated with any improvement in
effectiveness.

Ethics

Mozilla now thinks of itself less as a custodian of the old Netscape
suite and more as a ‘privacy NGO’. One slogan inside Mozilla is: “Beyond
the Browser”.

Regardless of how they view themselves, most of their income comes from
helping to direct traffic to Google by making that search engine the
default in Firefox. Google make money off that traffic via a big targeted
advertising system that tracks people across the web and largely without
their consent. Indeed, one of the reasons this income is falling is because
as Firefox’s usage falls less traffic is being directed Google’s way and so
Google will pay less.

There is, as yet, no outbreak of agreement among the moral philosophers
as to a universal code of ethics. However I think most people would
recognise hypocrisy in Mozilla’s relationship with Google. Beyond the
ethical problems, the relationship certainly seems to create conflicts of
interest. Anyone would think that a privacy NGO would build anti-tracking
countermeasures into their browser right from the start. In fact, this was
only added relatively recently (in
2019
), after both Apple (in
2017
) and Brave (since release) paved the way. It certainly seems like
Mozilla’s status as a Google vassal has played a role in the absence of
anti-tracking features in Firefox for so long.

Another ethical issue is Mozilla’s big new initiative to move into VPNs. This doesn’t make a lot of
sense from a privacy point of view. Broadly speaking: VPNs are not a useful
privacy tool for people browsing the web. A VPN lets you access the
internet through a proxy – so your requests superficially appear to come
from somewhere other than they really do. This does nothing to address the
main privacy problem for web users: that they are being passively tracked
and de-anonymised on a massive scale by the baddies at Google and
elsewhere. This tracking happens regardless of IP address.

When I tested Firefox through Mozilla
VPN
(a rebrand of Mullvad VPN) I
found that I could be de-anonymised by browser fingerprinting – already a
fairly widespread technique by which various elements of your browser are
examined to create a “fingerprint” which can then be used to re-identify
you later. Firefox, unlike some other browsers, does not include any
countermeasures against this.

firefox's results on panopticlick - my browser has a unique fingerprint
Even when using Mozilla’s “secure and private” VPN, Firefox is
trackable by browser fingerprinting, as demonstrated by the
EFF’s Panopticlick
tool
. Other browsers use randomised fingerprints as a
countermeasure against this tracking.

Another worry is that many of these privacy focused VPN services have a
nasty habit of turning out to keep copious logs on user behaviour. A few
months ago several “no log” VPN services inadvertently released terabytes
of private user data that they had promised not to collect in a massive
breach
. VPN services are in a great position to eavesdrop – and even if
they promise not to, your only option is to take them at their word.

Results

I’ve discussed the Mozilla chair’s impressive pay: $2.4m/year. Surely
such impressive pay is justified by the equally impressive results Mozilla
has achieved? Sadly on almost every measure of results both quantitative
and qualitative, Mozilla is a dog.

Firefox is now so niche it is in danger of garnering a cult following:
it has just 4% market share, down from 30% a decade ago. Mobile browsing
numbers are bleak: Firefox barely exists on phones, with a market share of
less than half a percent. This is baffling given that mobile Firefox has a
rare feature for a mobile browser: it’s able to install extensions and so
can block ads.

Yet despite the problems within their core business, Mozilla, instead of
retrenching, has diversified rapidly. In recent years Mozilla has
created:

  • a mobile app for making websites
  • a federated identity system
  • a large file transfer service
  • a password manager
  • an internet-of-things framework/standard
  • an email relay service
  • a completely new phone operating system
  • an AI division (but of course)
  • and spent $25 million buying the reading list management startup,
    Pocket

Many of the above are now abandoned.

Sadly Mozilla’s
annual report
doesn’t break down expenses on a per-project basis so
it’s impossible to know how much of the spending that is on
Mozilla’s programme is being spent on Firefox and how much is being spent
on all these other side-projects.

What you can at least infer is that the side-projects are expensive.
Software development always is. Each of the projects named above (and all
the other ones that were never announced or that I don’t know about) will
have required business analysts, designers, user researchers, developers,
testers and all the other people you need in order to create a consumer web
project.

The biggest cost of course is the opportunity cost of just spending that
money on other stuff – or nothing: it could have been invested to build an
endowment. Now Mozilla is in the situation where apparently there isn’t
enough money left to fully fund Firefox development.

What now?

Mozilla can’t just continue as before. At the very least they need to
reduce their expenses to go along with their now reduced income. That
income is probably still pretty enormous though: likely hundreds of
millions a year.

I’m a Firefox user (and one of the few on mobile, apparently) and I want
to see Mozilla succeed. As such, I would hope that Mozilla would cut their
cost of administration. I’d also hope that they’d increase spending on
Firefox to make it faster and implement those privacy features that other
browsers have. Most importantly: I’d like them to start building proper
financial independence.

I doubt those things will happen. Instead they will likely keep the
expensive management. They have already cut spending on Firefox. Their
great hope is to continue trying new things, like using their brand to sell
VPN services that, as I’ve discussed, do not solve the problem that their
users have.

Instead of diversifying into yet more products and services Mozilla
should probably just ask their users for money. For many years the Guardian
newspaper (a similarly sized organisation to Mozilla in terms of staff) was
a financial basket case. The Guardian started asking their readers for
money
a few years ago and seems to be on firmer financial footing
since.

Getting money directly has also helped align the incentives of their
organisation with those of their readers. Perhaps that would work for
Mozilla. But then, things are different at the Guardian. Their chief exec
makes a mere £360,000 a year.

Contact/etc

See also

Other charities with cost control problems

Another notable technology NGO with huge expenses is The Wikimedia
foundation. You can read more about their problems in Wikipedia
has Cancer
which uses a very dodgy metaphor but is otherwise a good
study of incredible spending growth there. Wikimedia has the advantage over
Mozilla that all contributors to its main project are unpaid – which only
makes the expenses all the more mindblowing. Wikimedia, like Mozilla, has
had a lot of side projects. At one point they were trying, in secret, to
build a whole
new search engine
.

A good example of a charity that shut down due to poor expense control
is Kids Company, a
British charity for helping vulnerable children. The Kids Company debacle
shows that shutdown can be quite abrupt. The British government provided
most of the funding but (eventually) lost faith and ceased their annual
grant which resulted in the charity being immediately liquidated. A House
of Commons committee released
a good report
.

Sources I used

Mozilla’s legal structure as a non-profit that owns a for-profit arm
makes their government filings (“Form 990″s) of pretty limited use as they
aren’t consolidated
and don’t contain any information about the majority of Mozilla activities.
The most useful thing about these documents is that people who are on the
board of the parent have to disclose pay from the subsidary (in Part IX,
generally on page 10). Propublica
have a complete set.

More useful is Mozilla’s annual report, which is consolidated. I haven’t
been able to find a master index of these but you can get there via the
“State of
Mozilla”
pages – you’ll need to edit the year in the url to get
previous annual reports.

I used
statcounter’s usage data
. I haven’t included any 2020 data as the year
isn’t out yet but it’s even worse than 2019 for Firefox.

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