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According to computer trade press reports, Mozilla's Firefox web browser has passed the magical 10% market share figure. What does this mean and why does it matter?

First of all what's magical about 10% market share? Well, for one thing it's double digits. For another, market share for a web browser is important because of the revenue deals that it can generate with paid search. For instance, every time an end-user clicks on an advertisement displayed via Google, resulting from a search through the Google search bar on Firefox, Mozilla rings up a sale. In 2005 it is reported that Mozilla had $70 million USD in search related revenues. On that count it means for Firefox that every one percent of market share is worth $7 million USD in search related revenue.

For Opera with its emphasis on cell phone browsing the revenue equation has several parts. First, customers are likely to spend more time using the cell phone, which is revenue for the network operator. Second they are more likely to click on search related advertising which is revenue for Opera. Third, Opera gets licensing revenues for deals that put its Mini software on cell phones.

Mozilla does not have a mobile browser for cell phones that is a completed shipped product. Opera's Mini software for cell phone browsing may offer the firm a strategic advantage that takes it out some of the pressure of head-to-head competition for desktop market share.

Opera's total revenue in 2005 was about $23M USD. It is difficult to break out the desktop revenues related to search because the firm does not report them that way. Significantly, Opera changed its desktop revenue model in Fall 2005 dropping the $39 USD licensing fee for the desktop browser and opting for paid search revenues by building market share. Opera inked search revenue deals for the desktop and cell phone browsers with Google and other search engines. In 2005 Opera's revenues from Internet devices increased by $3.2 million USD over 2004.

Second, market share is important because it attracts independent application developers. Mozilla has long promoted the development of open source extensions to its browser. Since programmers have to make a buck to live, the develop applications for the "platform," e.g., browser, that has the greatest market share because that's where the money is. As Mozilla's market share grows, the number of extensions available for it reinforce its attractiveness to end-users. The more attractive a product is, the more people use it, and the more search related revenues it gets. So, it is in Mozilla's interests to promote extensions to build market share.

Opera's current shipped desktop browser 8.54 doesn't support extensions like the Firefox browser. That will change with version 9 of the Opera desktop browser code named "Merlin." Opera will offer widgets, which are desktop applications that work with the browser. Opera Widgets are small web applications run directly on a user’s desktop. With Opera Widgets you can quickly write small, focused applications that perform useful tasks. They can interact with online services such as news feeds, dictionaries or search engines.

"Merlin" is currently in a pre-beta stage called "Technology Preview." Weekly builds are available for anyone who wants an early look at the product. The Weekly Builds are snapshots, they are not as thoroughly tested as a Technology Preview or a Public Beta. You should only use these builds if you are not afraid of losing data (e-mail, bookmarks, anything) or crashing your computer.

Independent software developers will be able to make widgets that work with Opera 9. Widgets are a terrific way to address the market share building power of "extensions." It will be interesting to see if Opera widgets have the same attractive power to independent software developers as Mozilla extensions.

Both browser companies are in a race to build market share, and there is only one place it can come from, and that is at Microsoft's expense. The Redmond, WA, software giant is currently stuck in the mud with delays announced last month for the ship dates for the new desktop operating system code named "Vista" which includes Internet Explorer 7. Every month of delay by Microsoft is more time for Mozilla and Opera to build market share. It also gives Apple Computer, with its new Intel-based Macs, a window of opportunity to build market share. These delays won't last forever. Once Vista does ship the throw weight of Microsoft's marketing efforts will have an impact. Whether Mozilla's market share is retained or grows, and what happens with Opera 9, are developments to be watched with interest.

For the statistically curious, here is a summary of recent browser market share statistics.

Report: Firefox Past 10 Percent Share
By Nate Mook, BetaNews
April 4, 2006, 4:54 PM

Web analytics firm Net Applications announced Monday that the open source Firefox browser has finally passed 10 percent market share, according to the firm's statistics for March. The 10.05 percent usage was up from 9.75 percent in February. Microsoft's Internet Explorer still holds a commanding lead with 84.7 percent of the market, Net Applications said.

However, according to another analytics firm, Firefox had already surpassed 10 percent market share last November. OneStat.com reported at the time that Mozilla browsers had reached 11.51 percent usage globally based on a sample of two million users from 100 companies.

Despite the conflicting numbers, it's clear that Firefox continues to gain a foothold -- especially overseas. Internet Explorer, meanwhile, is continuing its slow slide. The ubiquitous browser held 86 percent of the market last November, and its market share of the browser has fallen every month except one since December 2004, when it controlled 90.31 percent of the market.
Over the last year, Firefox has gained an additional 3.34 percent of the market.

Internet shopping for information, home appliances, cars, clothes, records, and books is fueling the spectacular growth of the Mozilla open source software foundation and its signature product the Firefox browser. According to an Internet Week report, Mozilla gained a reported $72M of revenue in 2005 from click through searches on Google via the Firefox browser. By comparison, Opera had $23M in total revenues in 2005 according to its public financial report.

Mozilla's Revenues

The revenue number for Mozilla is in some dispute, but a spokesman for Mozilla said the estimate isn't off by much. Eventually, as a nonprofit corporation, Mozilla will have to file a revenue statement with the US government tax agency. That statement is a public filing which means the real number will come out sooner or later.

It should be lost on no one that Google strongly supports the Firefox browser through a free toolbar and the search giant pays programmers to work on developer of each new version. Google is using Firefox to drive searches, and click through advertising, to its search portal. Google reported that in 2005 it had revenues of $6.1B. More than half of that amount, $3.4B, came from search related advertising alone.

Opera's Revenues

Undoubtedly, Opera, which also has search revenue deals with Google for desktop and mobile device products, would love to have Mozilla's numbers. According to the public 4Q05 year-end report, Opera's year-end financials tell a story of a company speeding up its transition from licensing desktop browser software to end users to licensing its mobile technologies to Internet devices sold by telecommunuications giants. This month Opera inked a deal for Opera mini with T-Mobile to put the software on three new phones sold in Europe. This is the latest in a string of deals that put Opera's software on mobile devices marketed to millions by cell phone firms. The T-Mobile deal alone boosted Opera's stock price by 8%.

Opera made the desktop browser free in 3Q05, which resulted in a significant drop in those revenues. Previously, a desktop license cost $40. However, Opera made huge gains in revenues from Internet devices with an increase of $3.2M in revenue over 2004. Opera also inked search revenue deals with Google, Amazon, and other search engine portal sites for both the desktop browser and Opera mini, the firm's newest mobile device software.

Here are some additional highlights. Opera's financials are reported in NOK. I've converted the figures to USD.

* Total operating revenues $22.8M, down 18% from 2004 (-$4.9M)
* Total operating expenses $22.6M, up 45% from 2004 (+7.0M)
* Earnings after taxes dropped from $8.7M to $0.5M

Opera hired 69 staff during 2005 and revenue per employee dropped 39% from $142K to $86K. Payroll increased 42% from $3.5M to $4.9M.

These numbers clearly show Opera's significant investments in new product development and marketing. The company operates on a global basis with fewer than 300 paid employess. By comparison, Mozilla reportedly has fewer than 50 paid employees, but still depends on a worldwide network of volunteer developers who participate as part of the open source movement.

What we are talking about here is Internet commerce. A great roll'n roll song titled Money for Nothing by the group Dire Straits has lyrics that go like this . . .

Now look at them yo-yo’s that’s the way you do it
You play the guitar on the mtv
That ain’t workin’ that’s the way you do it
Money for nothin’ and chicks for free
Now that ain’t workin’ that’s the way you do it
Lemme tell ya them guys ain’t dumb

We gotta install microwave ovens
Custom kitchen deliveries
We gotta move these refrigerators
We gotta move these colour tv’s


And here is the rest of the story about Mozilla's millions . . .

http://www.internetnews.com/dev-news/article.php/3590756

March 10, 2006
Mozilla's Millions?

By Sean Michael Kerner
Internet News

Thanks to Google, Mozilla is raking in millions of dollars of revenue, which is used to pay the employees of the recently formed Mozilla Corporation and fund project and infrastructure development.

Google, which makes its share of philanthropic and open source donations, also directly employs a few Firefox developers, including lead developer Ben Goodger.

Google isn't just paying Mozilla "millions" out of the kindness of its heart. It's more so based on the same basic principle which it pays other partners and affiliates, namely search.

The default start page for Firefox includes a Google search dialogue box. It also defaults to Google search in its engine option on the Search Bar within the browser navigational toolbar. Mozilla gets paid a publicly undisclosed amount for each Google search query made from Firefox by a user.

That Google pays content and search partners, as well as AdSense participants, is not new. What is interesting, however, is the amount that Mozilla earns from its users' Google queries.

"We are very fortunate in that the search feature in Firefox is both appreciated by our users and generates revenue in the tens of millions of dollars," Mozilla head Mitchell Baker wrote in a recent blog post.

One blogger has speculated that the figure is as high as $72 million in fact.

Mozilla Corporation board member Chris Blizzard said that the $72 million figure is not correct, "though not off by an order of magnitude."

The Mozilla Corporation uses the fund to pay its employees which currently number 40 full-time equivalents (FTE) according to Baker. Most of those FTE's reside in either Mountain View, Calif., or in and around Toronto, Canada.

With the release of Mozilla's Firefox V.1.5 slated for the week of November 29th, computer trade press reports indicate Mozilla will kick off a major marketing campaign, including videos from users, to promote the product.

Firefox plans mass marketing drive
By Ingrid Marson, ZDNet UK
Wednesday, November 23 2005 07:48 AM

The Mozilla Corporation is gearing up to launch a large-scale marketing drive when Firefox 1.5 is released.

Christopher Beard, the vice-president of products at Mozilla Corporation, told ZDNet UK on Monday that there is a "strong likelihood" that Firefox 1.5, the next major version of the open source browser, will be released on 29 November.

Beard said the Corporation is planning a "big marketing push" that will coincide with the release of 1.5. This will include a community marketing campaign that will encourage Firefox fans to tell the world about their favourite browser by publishing home-made videos on a Mozilla Web site.

Mozilla's Firefox web browser set a goal of getting 10% market share, but instead has numbers just under 9%. The obvious next step for the now commercialized Mozilla organization is a marketing campaign. According to Mozilla, "community, open-source marketing only gets us so far." Here are the details.

Firefox Turns 1, Ratchets Up Marketing
By Gregg Keizer, TechWeb News
Nov. 9, 2005

[snip]

According to the most recent numbers cited by NetApplications, Firefox accounts for 8.6 percent of the browsers used, still slightly down from the year's high of 8.7 percent in June.

To boost those numbers, Mozilla's planning on changing its marketing tactics. "We've had very strong adoption by power users, far beyond what we're seeing for average consumers," acknowledged Beard. "Next we'll target technically-savvy consumers with a campaign that focuses on a great user experience, how Firefox is simple to use, and how it has a good security profile." In the next few weeks, the SpreadFirefox.com site -- Mozilla's community-based marketing and enthusiast site -- will re-launch with a new set of campaigns, including video that site operators can add to promote the browser.

"But that kind of community, open-source marketing only gets us so far," Beard admitted. "To reach people who aren't as familiar with the Web, we need more traditional approaches." Although he declined to name names, Beard said that such efforts would rely on partner relationships, new and existing, in 2006. Those partners -- Google is one already, as is EarthLink -- would include ISPs and Web service providers.

In Shakespeare's play the Tempest a bit of the dialog goes like this . .

-- I can call creatures from the briney deep
-- Yes, but will they answer?

The question here is how the 100 million downloads claimed by Mozilla's Firefox browser translates into real users and more importantly market share. eWeek reports (below) that less than half that number of downloadeds are actual users.

More impressive is the claim by the Mozilla foundation that 100,000 people contributed to the various builds of the open source product that has now followed the commercial spin-off from the non-profit Mozilla foundation.

The wealth creation that will come from an IPO for Mozilla's prodcut line (Firefox, Thunderbird) will be fueled by the unpaid contributions of those 100,000 people. If I was one of them, I'd feel like I'd been misled having swallowed the open source idealism hook, line, and sinker.

Firefox Hits Download Milestone
By Matt Hines
October 20, 2005

The Mozilla Corp. announced Thursday that its no-cost, open-source Web browser, Firefox, had reached the 100 million download mark, hitting that milestone less than one year after the software was first introduced.

Launched in Nov. 2004, the browser currently boasts an estimated 45 million individual users, many of whom have already cycled through multiple iterations of the browser.

The group estimates that some 100,000 individuals have built, tested and promoted the software.

[snip]

However, despite the impressive download figure, at least one research group reports that usage of Firefox may actually be sliding. According to Janco Research, based in Park City, Utah, Firefox ranks second in the browser market with 8.8 percent of all users, while Explorer still commands 85 percent of all Web surfers.

[snip]

Janco's third-quarter browser market report stands in sharp contrast to its second quarter research which had predicted that Firefox could take over as much as 25 percent of the sector before the end of 2005.

Netscape, Safari gain at Mozilla's expense

FireFox Stumbles Again, Netscape and Safari Continue Growth Reports NetApplications
Monday October 10, 9:01 am ET
NetApplications Releases September 2005 Browser Activity

ALISO VIEJO, Calif.--(BUSINESS WIRE)--Oct. 10, 2005--NetApplications, a provider of Web-based applications that measure, monitor and market Web sites for the Small to Medium Enterprise (SME), today announced its monthly Web site traffic analysis. In September, Netscape Navigator and Apple's Safari continued their modest gains for the second straight month, while FireFox lost market share for the second time in 2005.

[snip]

"Opera made news last month when it announced that it will offer its browser for free, without advertising in what appeared to be a response to the wild adoption rate of FireFox," Vince Vizzaccaro, executive vice president of marketing and strategic relationships for NetApplications. "FireFox, Safari, Netscape and now Opera are jockeying for position and implementing aggressive marketing maneuvers which is setting the stage for a very exciting month in October and throughout the remainder of 2005."

September Browser Market Share:

Microsoft Internet Explorer - 86.87%
FireFox - 7.55%
Safari - 2.39%
Netscape - 2.16%
Opera - 0.51%
Other - 0.51%

August Browser Market Share:

Microsoft Internet Explorer - 86.31%
FireFox - 8.27%
Safari - 2.20%
Netscape - 2.02%
Opera - 0.62%
Mozilla - 0.51%
Other - 0.08%

Additional stats are available at http://marketshare.hitslink.com.

Mozilla issues security fix for Firefox 1.06

CNET News.com is reporting that details of an unpatched buffer overflow flaw in Mozilla Firefox have been made public. The security vulnerability is caused by a bug in the way long links with dashes are handled and is reported to allow an attacker to execute arbitrary code on a victim's system.

The downloadable patch information for disabling IDN support is now available. It does not update the version number as originally planned, instead adding "(noIDN)" to the user-agent string.