[...] created a response post that addresses some of the points in the comments titled Mozilla's Not Non-Profit (and Other Thoughts). Thanks to everyone who read this and considered its content and has an opinion to share. [...]

From what I understand, reinvesting your profits in your business instead of paying them out to shareholders does make you a non-profit organization. You can have a non-profit organization that is profitable. Being profitable is what in many cases makes the organization sustainable.

Non-profit organizations are governed by very-specific rules about how they earn money, how much they can earn, what they can do with that money, and having balanced books at the end of the year that say -0- in Net Income (profit).

A good example of a company that is profitable but (under your definition) would be seen as non-profit is Apple. They do not pay dividends on the stock and haven't since 1995.

http://phx.corporate-ir.net/phoenix.zhtml?c=107…

This means that 100% of their profit is reinvested into the company (and yes, paying executives does actually count as an expense of capital so there's no loophole here).

Google is much the same:

http://investor.google.com/faq.html#dividend

Mozilla works very hard to portray themselves as a non-profit organization; but the corporation does not fit any accepted form of that definition.

well, guess what? opera supports H.264 through gstreamer…

which FF could do as well; but Mozilla refuses.

Well, I don't see why you are bashing Opera then? You are using the last browser without HTML5 H.264 support, isn't this the point?

Bashing Opera? All I said was I don't care about Opera. No bashing there.

And actually, I use Chrome and Safari more as daily browsers. The only thing that keeps me tied to FF is Firebug.

I'm not sure whether you dislike(or rather don't care about) Opera because of its closed nature or because of its small usage share or because of its loud users(like me). If its usage share thats bugging you, I want to tell you that any new browser(not talking about Opera) that may come up with innovative ideas and wants to be cross-platform is going to be effectively stifled by the large money they would be required to pay. You may not care about such browsers but the web deserves a chance to have great ideas from all quarters, small or big, and not just be controlled by large corporations like Microsoft,Apple and Google. Whether that is according to the ideals of capitalism or not, the web would best develop if the Internet and the web is allowed to remain open.
About Opera, I am not horrified because despite being closed and despite having the capability and money to implement h264, they do recognize the potential of the open web(instead of a open browser which really won't be helpful to anyone). Mozilla does too and I hope it keeps on doing it. In the future also I would like to be able to switch to any browser, small or big, that believes in quality, and do not want to be restricted to crappy(imo) products from the big 4.

“but the corporation does not fit any accepted form of that definition.”

…except the legal one defined by the Federal government.

If you visit the Mozilla Foundation donation page (http://www.mozilla.org/foundation/donate.html), you'll see this:

The Mozilla Foundation is a California non-profit corporation exempt from federal income taxation under IRC 501(c)3. Donations are tax deductible for U.S. citizens.

So, either they are guilty of rather blatant tax fraud or they are actually a non-profit according to the only definition that really matters.

The MoCo is different than the MoFo. http://en.wikipedia.org/wiki/Mozilla_Corporation

The Mozilla Foundation has a fully armed and operational for profit corporation, they are just directing all the revenue it creates back into the MoFo projects.

James is absolutely correct.

The more I've investigated and thought about this today, the more it angers me the lengths that the entire Mozilla organization has gone through to obscure the fact that Firefox is is a FOR PROFIT business.

I'm curious, have you played much with the Web Inspector in recent versions of Safari? I haven't used Firebug much, or recently, but I find Safari's Web Inspector really useful. If Safari is missing something genuinely useful that Firebug provides, I'd be interested to hear what that is.

Jay Robinson has a good write-up on the shortcomings of Web Inspector here:

http://jayrobinson.org/2009/12/05/webkit-web-in…

Nothing wrong with being a “for profit” business in itself of course. I'm curious as to why they work so hard to obscure the fact. Makes you wonder what they're afraid of.

Does kinda mean they can't claim they can't afford to licence stuff though, huh?

Got to admit I've been a strong advocate of Firefox on the desktop but this plus a few other things (fiddling around with stuff like tab orders and skins/backgrounds when there's other stuff to be done) makes me wonder if the old phoenix project has kinda lost its way.

They obscure it because it's a high-profile open source project that wouldn't get nearly as much support from the community if people were readily aware of it's actual nature.

The truth is; most people don't bother to check, and they basically assume that everything is run out of the Foundation.

I'd take the Firefox devs arguments about “proprietary vs. open” (H264 vs Ogg Theora) a lot more seriously if they had never bundled Flash (proprietary) in with their browser, but rather, on principle, made it a download people had to go to Adobe to go install each time.

The fact is, they made a business decision back then, not a moral decision, when they chose to not just support Flash, but actively encourage its use as a standard, despite it being proprietary then, and proprietary now. To try to claim the moral high ground now over HTML5 just doesn't ring as true to me.

As pointed out above, “non-profit” and “for-profit” have nothing to do with whether or not an organization makes money, or whether or not the people that work for the organization are paid well or not.

For example, the average salary of the “leader” (CEO, President, Director, whatever) of non-profits in the united states is $148K per year, with the highest being $1.5m (paid to the President of the non-profit John Hopkins University). For large national non-profits (including charities), top salaries routinely exceed half-a-million dollars a year.

The terms specifically refer to whether or not not *investors* in the organization are entitled to, or expect a return on that investment. Someone who puts money into a non-profit is not expected to get a profit on that investment. In the case of a Charity, they may get zero of it back. In other cases, they may get 100% back.

For-profit companies are (at least in theory — see the examples of non-dividend paying companies) expected to return some of their money back to the investors in the company.

Being a non-profit entitles you to tax breaks, so if you can do so, it's in your best interest to be a non-profit.

Of course, in the communities that are driven by volunteer efforts, it is often in the best interest of organizations to be designated non-profit since most people don't understand the difference and conflate “non-profit” with “charity.”

As pointed out above, “non-profit” and “for-profit” have nothing to do with whether or not an organization makes money, or whether or not the people that work for the organization are paid well or not.

For example, the average salary of the “leader” (CEO, President, Director, whatever) of non-profits in the united states is $148K per year, with the highest being $1.5m (paid to the President of the non-profit John Hopkins University). For large national non-profits (including charities), top salaries routinely exceed half-a-million dollars a year.

The terms specifically refer to whether or not not *investors* in the organization are entitled to, or expect a return on that investment. Someone who puts money into a non-profit is not expected to get a profit on that investment. In the case of a Charity, they may get zero of it back. In other cases, they may get 100% back.

For-profit companies are (at least in theory — see the examples of non-dividend paying companies) expected to return some of their money back to the investors in the company.

Being a non-profit entitles you to tax breaks, so if you can do so, it's in your best interest to be a non-profit.

Of course, in the communities that are driven by volunteer efforts, it is often in the best interest of organizations to be designated non-profit since most people don't understand the difference and conflate “non-profit” with “charity.”

Quite right; I would note, however, that a very stringent requirement for non-profit organizations is that they must operate a zero-sum balance sheet. They can take in a ton of money; but they have to use all of that money (and there are some pretty hefty restrictions on how they can come to acquire that money). The Mozilla Corporation exists because its activities do not conform to the rules governing non-profit organizations; they actively retain net income, and their methods of earning money fall outside the scope of allowed activities for a non-profit organization.

Quite right; I would note, however, that a very stringent requirement for non-profit organizations is that they must operate a zero-sum balance sheet. They can take in a ton of money; but they have to use all of that money (and there are some pretty hefty restrictions on how they can come to acquire that money). The Mozilla Corporation exists because its activities do not conform to the rules governing non-profit organizations; they actively retain net income, and their methods of earning money fall outside the scope of allowed activities for a non-profit organization.

There is no flash bundled with Firefox. You are mistaken.

H264 has hardware decoding support in every (to my knowledge) major new mobile platform.

No other video codec does. End of story.

Not being flippant, but the future of what is “standard” on the web will be driven by what the mobile browsers support. The fact that Flash support is spotty and HTML5 support is widespread (thanks to webkit) is driving major sites to rewrite things that were previously done in Flash.

Even if Theora and H264 were completely equivalent, this would be a major driving factor in choosing one over the other, particularly as mobile marketshare continues to increase rapidly over the next few years.

The takeaway point for Opera fans here is that it no longer matters whether it's morally or philosophically the best option, it's what's going to happen. For firms too small to afford licensing, it should not be that big of a deal to write an architecture to take advantage of either a traditional plugin or some hook into a system framework (like Quicktime) to handle H264 decoding, and make it an easy install or integral to the product for the architecture in question. Such a system, especially if someone writes a portable framework for hooking into a system-level video processor, is still plenty portable and allows new systems without the costs to get a license to decode H264.

Also, on Mozilla, the relevant page is here:

http://www.mozilla.com/en-US/about/whatismozill…

…in which they do explicitly state that they're a for-profit corporation, though a wholly owned subsidy of the Foundation nonprofit.

The other points of discussion in your post notwithstantding (in particular, the definition of “non-profit” and whether Mozilla qualifies), please amend it by removing the claim that Mozilla Corporation owns the rights and trademarks to Firefox and noting that despite that previous claim, it is in fact the Mozilla Foundation that has ownership of those marks and not the corporation. Verifying this with the USPTO is easy enough, and if you're looking for something straight-from-the-horse's-mouth, I know for a fact that there exists some wording that says as much on mozilla.org, probably in a policy page governing trademark usage.

Thank you for commenting; I've updated the post accordingly.

I'm not particularly worried about browser vendors having to pay a license fee, and I'm sure Mozilla could afford it easily.

My worry is that content providers (the actual websites themselves) will be forced to pay licence fees to display H.264 encoded content on their websites. I know that content providers currently don't have to pay anything at the moment, but that rule only lasts until 2014. How can we be sure that the MPEG-LA working group won't turn around and start charging for H.264's use once it becomes the dominant format (like what happened with GIF).

Also the web was founded on open/free standards which has allowed the web to proliferate and allowed compelling apps to emerge such as YouTube and Facebook. You don't have to pay licence fees to use HTML, JavaScript, CSS or PNG images. But now for the first time we're allowing a proprietary, patent/licence emcumbered format to become a standard on the web, and it sets a dangerous precedent . I only worry that by the time we start to feel the consequences, it'll already be too late.

By those standards MOST non-profits would be considered For profit. I have had discussion with everyone from Mozilla, Google, Apple and Microsoft execs… Google (Jonathan Rosenberg's team) approached me as they were about to launch a video search 5 years ago. There is no comparison to which company is fighting the good fight. The sociological details of why the other bigger companies have been hindered in forcing their patents and licenses down users throats for their economic profits… is wholly clear. Debate is great but when you make a statement that would accuse Mozilla of something MOST non-profits do (because they have to to afford talent and an actual workforce ugh) even though they are doing a service that you won't even acknowledge… you sound simply misinformed. sorry

Note: I work for Mozilla

A lot of food for thought here, especially on the impact of Mozilla's stance on H.264, but also on Firefox.

As a Mozilla employee, I would of course disagree with some of what you say. The thing that concerns me is that you appear to feel there is deceit involved in Mozilla presenting itself as a public benefit organisation. I feel that Mozilla demonstrably executes against its mission (and certainly not against a share price).

As I think you are aware, the Mozilla Corporation is wholly owned by the Mozilla Foundation. I would have thought that Mozilla is a very good example of an open source project which manages to compete in commercial markets, be sustainable and also maintain a transparent governance and organisation model.

What do you feel Mozilla needs to do to be transparent enough?

The people judging Mozilla don't think pragmatic, just they think like that they are buying a new computer and they want to pick best one. The web is not your toy. Companies may develop a good software but open source win the war every time. As I mentioned in the first blog post, capitalism can't work in the computing world. Sorry for repeating but here the comments I've written to previous post:

“There may be better codecs than open codecs but we have to support open standards, everytime. Like most of us, Mozilla is sure about that technology is being improved faster when it’s open. We have to support open standards, not capitalists who make slower development of the technology to make more money.”

“It's clear that you people supporting capitalist economy know nothing about the history of the development of the societies and the economics science. We know that companies can develop a technology too fast, because in capitalism, companies make money by decreasing cost of the production. But in computing, capitalism CAN'T work. Because, it can't get enough support from it's major supporting devices like military and government. Also, things forming bourgeois class like raw material, production devices and distribution are not under control of the companies. Believe the economics science, capitalism doesn't work in an environment that allow FREEDOM. Today, they can develop a software which is so good. But open source win.

Regards.”

Hi Patrick,

Thanks for taking the time to write; I'll try to respond to your points as best I can.

Mozilla Corporation is a very much for-profit business; you being an employee should be well aware of that. The fact that it's only shareholder is a non-profit organization doesn't change the facts about the corporation; it just means that the corporation generally doesn't pay a dividend on its stock to it's shareholder (or if it does, it's limited in what it can pay).

I applaud them for this honestly, primarily because I'm not one of the free software zealots who believes that capitalism and profit are bad things and I completely agree with your point that Mozilla is a good example of an open source project competing in commercial markets.

And while you're right that Mozilla is a properly run corporation (transparent governance and org. model) that doesn't mean it's not a corporation. Again, the open source world attracts a lot of people who automatically assume a negative connotation when the word “corporation” is used; I'm using it purely to describe the legal entity–not whether that entity is in some way evil.

But when I look at Mozilla Corporation's linkedin profile:

http://www.linkedin.com/companies/mozilla-corpo…

It states that Mozilla is a non-profit (which is true if you're referring to the Foundation; but decidedly not true if you're referring to the corporation to which this page clearly refers). That is deceitful.

Look at the public perception of Mozilla (as a whole); the fact that I'm having to try to convince people that Mozilla Corporation is not some little non-profit with no capital and no profits. It demonstrates that the corporation hasn't done good job of being open about the fact that they operate as a for-profit operation. All of this makes the conversation about whether or not Mozilla can afford the license for H264 (if they do indeed have to buy one) moot; a for-profit business with 270+ employees has enough capital to make a single $5m purchase (again, I'm not debating here whether they *should* make that purchase, only that they *can*)

And just like I said to you on the other thread; you're just an anti-capitalist. How can you say honestly and openly that free software wins every time? What's the state of a free software desktop (I hear 2010 may be the year of the linux desktop…10 years in maybe it has a chance).

The general public (unlike you) does not care about your development methodology. It's fine that you do, but to make blanket statements about “capitalism doesn't work in computing” is both incredibly naive and just plain wrong.

Good point about the Linkedin profile, if applied only to the Mozilla Corporation. “Deceitful” feels a bit strong, but I know what you mean.

But I would question to validity of considering the Mozilla Corporation out of the context of all of Mozilla however. Many public benefit organisations are non-profit but have revenue generating (for-profit) subsidiaries. Being revenue generating, however, does not mean that the Mozilla Corporation is not aligned with the goals of the Mozilla Foundation. That is what the Mozilla Corporation executes against.

I hope that Mozilla is pretty open about its finances (e.g. http://blog.lizardwrangler.com/2009/11/19/state… ). But clearly, you feel we can do better there.

As you wrote, I'm not just a anti-capitalist. You've understood nothing except that “I'm an anti capitalist”.

Firstly, you people judging Mozilla act like a kid who wanting to get best toy. You can't figure out that there will be better toys and you will need to cry again to get best one. You want your parents to buy best toy every time, but the web is not your toy. You can not get what you want every time. People are crying for 6 years because of the craps Microsoft produce every year.

Secondly, if you try to be pragmatic, read the history. Not only history of the desktop environments or computing world, but also development of the societies and the economics. There is a branch of science trying to find best way to move humanity forward.

Thirdly, there are many great desktop environment alternatives you have no idea about them, too. Keep believing in the money.

Since I have a choice in my browser, I can choose to use a Webkit based browser. My purpose for writing this was to push Mozilla to rethink what they're doing and decide if taking this particular stand and fighting this particular battle is worth the harm it will bring to the Web. I'm not crying at Mozilla, I'm telling them my opinion. I'm one of the people who believe that Mozilla will suffer if they continue with this choice and I don't want to see that happen.

I'm being pragmatic and there's just as much (if not more in cases) to support my argument than yours. Your talk of societal development is a big strawman here; but I'll entertain it briefly: huge development in science and technology is enabled every year by the capitalism you so despise. While it may not be your particular nature, human nature in general aligns very well with reward system that capitalism puts in place.

As far as my knowledge of alternate desktop environments, I've been an avid linux user on both the server and desktop since the mid 90's, so I'm well aware of the technologies powering those desktops. This really seems like another strawman to me so I'm leaving it here.

I'm not just a anti-capitalist, you've understood nothing except I'm an anti-capitalist. Of course, it's a step.

Firstly, the people judging Mozilla act like a kid wanting to get best toy. But this kid has no idea about that companies will produce new/better toys and he will need to cry again to get better ones. You may force your parents to buy the toys you want, everytime, but the web is not your toy. Most people are crying for 6 years about the craps Microsoft produce every year.

Secondly, as I said, capitalism can't work in computing world. It's not an observation belong to anti-capitalists, It's a clear scientific fact make capitalists to think open source is communism. Let me quote the explanation I've written:

“But in computing, capitalism CAN'T work. Because, it can't get enough support from it's major supporting devices like military and government. Also, things forming bourgeois class like raw material, production devices and distribution are not under control of the companies. Believe the economics science, capitalism doesn't work in an environment that allow FREEDOM. “

Learn the history. Not only history of the video codecs, desktop environments, computing history, but also development of the societies and the economics.

Thirdly, there are many better desktop environment alternatives for Linux that you have no idea about.

You're right of course and this is a shame. I don't see making a profit as something to be ashamed of, if anything Mozilla should be serving as poster child for the idea that it IS possible to make real money from open source.

If actually publicising their profits would actually harm them in some way, either causing users to change or developers to walk away, then that says something very interesting about the open source community imho.

“Mozilla's Not a Non-Profit”

No, it isn't. You seem confused and more interested in sophistry than rationality.

Just take a deep breath and think about what you're saying logically. Your contention is that the Mozilla Foundation, a very public, very visible organisation, has some how, for *years*, managed to deceive the IRS as to it's “true” status as a for-profit organisation.

There's no mystery here. There's no conspiracy. The Mozilla Foundation and the Mozilla Corporation are not somehow secret or working to further clandestine agendas. Please grow up.

Please read what I've written if you're going to comment.

I have not once said that the Mozilla Foundation is not a non-profit organization. I'm saying that Mozilla Corporation is absolutely a registered FOR PROFIT corporation. There's been no deception by the foundation.

But don't let the fact that the Foundation is the sole stockholder of the corporation make you think that the corporation isn't a for-profit (and very profitable) entity. The Corporation is actually quite up front about it's for-profit nature.

You say that “the most common argument has been that 'Mozilla's just an open source project, they can't afford a license.'”. But you fail to substantiate who has made this argument or demonstrate when it has ever been the “most common”. Can you substantiate your claim? If you can't then the only conclusion can be that you're setting up straw man arguments for your own ends.

Then you go on to say that Mozilla Corporation has been “successfully pulling the wool over the eyes of so many people” and give one pretty feeble example. How can you in all honesty suggest that Mozilla's structure from the Mozilla Foundation, to the Mozilla Corporation, to Mozilla Messaging is in any way deceitful or deceptive? It's all well laid out and described in detail on Mozilla's very own publicly accessible websites.

The deal will ensure that the non-profit Mozilla foundation will … You need to re-think over your thoughts coz the thing is Mozilla!