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The Mozilla foundation, the makers of the Firefox software that has been downloaded on over 77 million computers, announced that they’re launching a corporate subsidiary of the foundation.

Mozilla’s new revenue-generating taxable subsidiary, which the organization will call the Mozilla Corporation, will be responsible for development and distribution of Firefox, Thunderbird, and other products. It will also serve as a commercial entity which will fuel the mission of Mozilla by raising funds.

Two years ago, before the Mozilla browser gained a market share of nearly 10 percent for Internet users, nobody dreamed an open source product could be this successful.

"The Mozilla Foundation's spirit and philosophy will be very much alive in the new organizational model, said Mitch Kapor, chairman of the board of the Mozilla Foundation.

So where will the money come from to feed this hungry new company? It’s not yet clear. Possibilities include development for 3rd part companies, branding of the Mozilla software, and premium tech support for commercial users.

It should be interesting to see what happens with Mozilla. Will corporate greed corrupt the innocent virgin coders who contribute to the current non-profit software company that is giving rivals such as Microsoft a run for its money? Mozilla says it isn’t going to happen.

According the Mozilla foundation website, the Mozilla Corporation will never be an IPO candidate, and will never offer stock options or buy-in opportunities for its employees, since the corporation will remain owned entirely by the mothership.

Others fear Mozilla will forget its roots and try to capitalize on the currently open-source Firefox browser, its flagship product. Once again, the foundation says there shouldn’t be a concern. According to the Mozilla site, the plan is to keep Firefox a completely free and open source product that the world can benefit from.

It should also be noted, that the shakeup at Mozilla was a carefully executed strategy, timed to allow an announcement during the 2005 O’Reilly Open Source Convention (OSCON).

Earlier this year, the Mozilla foundation board of directors established an advisory committee, consisting of Mozilla contributors, and open source software experts, to evaluate the proposed reorganization of the foundation. Evidentially, they thought it was a good idea.

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As asked, the move to a taxable, revenue-generating arm isn't automatically "selling out." Nonprofits commonly set up separate for-profit subsidiaries to run commercial activities without risking the parent organization's tax-exempt status or exposing donors' funds to commercial liability. This is a normal legal/tax strategy, not a surprise. (americanbar.org)

Where the money actually comes from matters. In practice, browsers have monetized user distribution through default-search and similar partnerships; Mozilla in later years relied heavily on those deals (Google at first, then large regional agreements and a notable Yahoo arrangement), which explains both the cash and the community anxiety about influence and concentration. (niemanlab.org)

That said, technical and legal safeguards exist. Firefox's source has long been published under Mozilla's open-source licensing (the MPL/GPL/LGPL mix and later MPL 2.0), and Mozilla's committer/contributor processes require contributors to license code under the project's outbound licensing rather than giving up all rights—so core code staying open is anchored in license and contributor policy, not only in nonprofit rhetoric. Watch for any changes to those documents. (searchfox.org)

Practical checklist for concerned community members: skim the foundation/corporation financial disclosures and public filings; read the committer/contributor agreement before contributing; monitor default-search and OEM deals (revenue concentration is the real leverage point); and participate in the project’s governance and mailing lists—transparency and active contributor oversight are the clearest protections. (jdsupra.com)

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It appears as though the Mozilla corporation will now use the Mozilla.com as a web address for the corporation.

Sound off What do you think? Did Mozilla sell out the open source community by moving to a for-profit entity? Or are they legitimately looking to earn some extra cash?

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