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Mozilla has released the financial statements for the year 2007, and to no one’s surprise Google was the biggest donor to the non-profit organization due to Mozilla’s agreement with Google. Apparently Mozilla racked in $66 million of its $75 million from Google, which amounts to 88% of its total revenues. The fact that revenues from Google are even bigger than they were in 2006, when they amounted to 85% and the fact that Google has extended the agreement for three additional years until 2011, are a telling pointer that Mozilla is actually an arm or subsidiary of the search giant.
But with money comes pain, so is the case with Mozilla, as the folks at IRS are now questioning its non-profit status:
In 2005 the Mozilla Foundation established a “tax reserve fund” for a portion of the revenue the Foundation received that year from Google. We did this in case the IRS (the “Internal Revenue Service,” the US national tax agency) decided to review the tax status of these funds. This turns out to have been beneficial, as the IRS has decided to review this issue and the Mozilla Foundation. We are early in the process and do not yet have a good feel for how long this will take or the overall scope of what will be involved.
Google is paying a commission for traffic referrals, just like they to do to Apple for Safari. Google *makes more money off of this deal than they pay to Mozilla*. They are not doing this out of the kindness of their heart. It is a business deal. That being said, they also have no control over the business operations of Mozilla. They could threaten to not renew the deal, but why would they, given that they a) make money off of it, and b) already have their own browser that they exert full control over.