What Does Mozilla Do With Its Dough?

Ubiquity-1
I went to a Microsoft event last night, and one of the things we talked about during drinks afterwards was what Mozilla does with all of the money it makes from driving search traffic to Google. The little search box in the upper right-hand side of Firefox is Mozilla’s cash-cow because Google pays Mozilla a referral fee when people use it.

And we’re not talking nickels and dimes. In 2006, the Mozilla Foundation made a $47-million profit on revenue of $66.8-million. That’s a sweet profit margin of 70.3%. (Here’s Mozilla’s 2006 financial statement)

So, what does Mozilla do with all this cash given it’s a non-profit organization in which a major chunk of its development efforts are fueled by the open source community?

The upside for Web users is that Mozilla isn’t sitting on its pile of cash. Instead, it’s got a growing number of interesting and possibly disruptive projects happening. This includes a new one called Ubiquity, a Firefox extension that gives Web users the ability to easily create all kinds of mash-ups.

Who knows whether Ubiquity will become ubiquitous but with more cash than it can apparently spend, Mozilla is becoming the Web’s Mad Scientist, working away on all kinds of new, wonderful and whacky experiments.

For more, check out TechCrunch and VentureBeat. As well, Mozilla’s Mitchell Baker wrote an extensive blog post last November that talks about Mozilla’s finances and strategic directions.

More: Here’s a video about Ubiquity from Mozilla’s Aza Raskin.

Even more: Microsoft released IE8 Beta 2 earlier today. After going to a presentation last night, my initial impression is that IE8 is playing catch-up to Firefox, even though IE still has about 70% of the browser market. The most obvious bow to Firefox is IE8′s introduction of add-ons.

Microsoft is also doing some interesting things with privacy, including a way to surf without leaving any tracks called InPrivate. I’m not sure InPrivate will resonate with users but it’s a nice feature if you want to wave the privacy flag.

Putting aside the new features, the more important development is Microsoft’s willingness to focus on innovation as a way to defuse Firefox’s momentum. This can only be a good thing for the Web, Web users and other browser makers if you believe in the idea that healthy competition is a positive thing.

And even more: Mozilla has extended its deal with Google for another three years. In 2006, Google accounted for $57-million, or 85%, of Mozilla’s revenue.

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Buzz About Data but Voice Still Rules

For all the talk about the iPhone, ringtones, the wireless Web and mobile e-mail, here’s the reality few people want to admit: the vast majority of wireless revenue comes from voice services because the vast majority of wireless subscribers mostly use their devices to talk.

Talking on your cell phone is no where near as sexy as using an iPhone or Blackberry but that’s the reality once you get beyond the hard-core business crowd and the geeks. Carriers are reluctant to admit as much because voice is a non-sexy, lower margin service compared with high-margin, sexy data services.

It’s not that often, for example, that you’ll hear ads from Verizon, AT&T, Rogers or Bell touting their crystal-clear sound quality when making a call. Instead, they’re trying to get you excited about being able to check your e-mail anywhere, anytime or surfing the Web so you can use Google at all hours of the day. It’s business, and the sweet profits are in data, not voice.

Still, the carriers are pounding away on consumers so they can justify the major investments they’ve made in 3G networks. Meanwhile, device makers such as Apple, Research in Motion, Nokia and Samsung are aggressively supporting the data “campaign” by making increasingly sleek and sexy smartphones.

Keep in mind, however, that buying one of these babies isn’t cheap after taking into account you either have to pay through the nose upfront or commit yourself to a long-term contract to reduce your upfront costs to something less than what your monthly mortgage payment might be.

I realize telling a device-loving, leading-edge audience that wireless data isn’t as sexy as cool as they think is probably going to encourage a lot of pushback. But that’s okay.

And it’s not to suggest that wireless data isn’t eventually going to be significantly more popular but right now, it’s not the imminent reality many techies believe.

Perhaps the most honest comment about the real wireless world appeared in a Canadian Press story that quoted IDC analyst Ramon Llamas.

“I look at a lot of Joe and Jane consumers on main street anywhere and a lot of them are pretty content with just a regular cellphone,” Llamas said. “It does what they need it to do and basically that is just to make a phone call.”

Next on this week’s wireless agenda is a hard look at the projections for mobile advertising and entertainment. Part one of this wireless series was yesterday’s look at “sublime” iPod Touch.

Update: BusinessWeek has an interesting story looking at how VoIP is going mobile. While the carriers will probably figure out a way to capitalize on this kind of data flowing over their networks, VoIP is something that likely scares them.

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The iPod Touch is Sublime But…

iPod Touch
After pining for an iPod Touch for months, I finally pulled the trigger recently – and now wonder why I waited so long.

In short, the Touch is sublime. It is a wonderfully designed and multi-functional product that probably doesn’t get the attention it deserves because of the obsession with the iPhone. Sure, it doesn’t have a phone or camera but Wi-Fi connectivity and ever-growing bounty of applications makes the Touch an interesting and useful device.

Since getting the Touch a couple of weeks ago, I’ve not only rediscovered my digital music collection but spent a lot of time on iTunes App Store downloading applications (mostly free ones) – everything from travel and food apps (Hotels.com, UrbanSpoon, BlackBook Guides and What the Locals Like) to utilities (Zenbe – a list-making app) and social media services (WordPress, Twitterific). Using the iTunes store, you can customize the Touch or iPhone to meet your personal or professional interests.

As for why I decided to buy a Touch rather than an iPhone, it came down to economics. Buying the Touch meant a one-time cost while getting an iPhone from Rogers meant locking into a three-year contract that would have cost $1,080 just for data. It wasn’t something I could justify. CBC suggests the three-year contract is the second most expensive in the world.

While I don’t pine for always-on access to the Web, it would be nice if the Touch had a camera and the ability to use VoIP. You could easily see a company such as Belkin make a camera peripheral that would plug into the Touch’s input jack or the dock connector, while VoIP seems like a remote possibility so Apple doesn’t piss of the carriers. (Check out petitinvention what an iPod Touch camera would look like.)

As well, Kevin Purdy makes a strong case for the Touch vs. the iPhone with a post entitled “Forget the iPhone–The iPod Touch is Good Enough”.

Before signing off, this is the first in a series of posts this week about the wireless Web. My thesis is while the iPhone and other smartphones such as the Blackberry Bold are amazing devices, they are not going to have as much of an impact on the mobile economy than most people think.

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Buying Quality vs. Buying Crap

Quality
Yesterday, I spent far more money than I could ever imagine on a new vacuum cleaner.

The purchase of a German-made Miele came after years of buying $100 at big-box stores that promised “Hurricane Suction” only to lose most of performance after a year or so. So while buying a Miele put a quick end to some recent penny-pinching, it seems to be a solid investment: a quality machine that will hopefully provide years of high performance.

In theory, this should be the goal for people looking to buy consumer electronics. In practice, however, consumers tend to be seduced by cost (the lower, the better) over quality. They buy a crappy product, use it for a short period of time, and then re-buy the same product. It’s a cycle that makes no sense other than being able to economically feed the need to buy something new.

Think about how many times you’ve considered two products, and picked the cheaper one, even though you rationally recognize the more expensive one is going to last longer and provide a better ROI. It’s doesn’t make sense.

Of course, consumer electronics makers are playing consumers for fools. They lure consumers with features most of us will never use while making products that aren’t designed or built to last. Even Maytag has sadly lost its status as a company that makes built-to-last products.

This model works as long as consumers are happy to accept low-cost, low quality products, while companies ferociously market features over quality. It’s a sad but harsh but sad reality.

More: Here’s an interesting article about how to squeeze more printed copies from low-cost printers. For people looking for a way to recycle gadgets, check out Gazelle.com, which will make you an offer on them based on condition and what packaging/accessories you have.

Even more: Jeremy Toeman has really good post looking at “14 Ways to Use Gadgets More Sustainably”. Lots of good words of advice, including “Don’t Need? Don’t Buy!”

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Google’s Swings and Misses

Google
The Economist has an article looking at how Lively, Google’s attempt to establish a foothold in the virtual world market, has flopped.

To be fair, it’s far too early to determine whether Lively is a failure given it was only launched last month but it did get me thinking about how some projects rolled out by Google have failed to resonate with the masses. Here are some of the leading candidates:

1. Froogle: the comparison-shopping site has never had much, if any, momentum despite the catchy name. Google eventually renamed its Google Product Search, which is far from inspiring.

2. Orkut: Other than Brazil and India, which respectively account for 53.86% 16.97% of Orkut’s users, the social networking service has not managed to made any inroads against Facebook or MySpace. Even Friendnster seems to have more traction.

3. Google Finance: Launched with much hype in 2006, it lags far behind Yahoo Finance, AOL Finance and MSN Money.

4. Google Blog Search: You would think that Google would dominate this market given it’s the dominant search engine. Yet, blog search remains a place where no one has really grabbed the bull by the horns.

5. GMail: People love it but Yahoo still dominates the Web-based e-mail market while Hotmail remains a strong second.

A disclaimer of sorts: Despite Google’s search dominance, there’s no way for a company to have smash-hits across the board. That’s just unrealistic.

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Anyone Care About the Palm?

Palm Treo
Amid the excitement about the iPhone (despite its software woes) and the recently-launched Blackberry Bold, you sometimes forget that Palm is still alive (if not well!).

Lest you forget, it wasn’t that long ago that the Palm was the hottest smartphone around. People loved the Treo. I can remember being invited to a REM concert by Palm Canada, and being excited because they gave us a Palm Zire as we headed home.

Today, Palm is pretty much a forgotten entity even though it continues to come up with new products, including the new Treo Pro. In some ways, the Palm’s troubles reflect two harsh realities: it struggled by trying to be all things to all people, and it was probably ahead of its time because the networks needed to have a great mobile experience weren’t around.

As Palm dealt with technical, financial and ownership issues, the smartphone market got away from it. The next thing you know, the Blackberry has gone from feisty Canadian start-up to the device used by millions to get mobile e-mail. Then, Apple moves into the market just as 3G networks are starting to emerge.

Palm’s trials and tribulations are common in nearly every industry but it is interesting that it’s nearly disappeared from the smartphone landscape.

For more thoughts on the Palm, check out Salon’s Machinist, which does a nice job looking back at the Palm’s history.

For more on Palm’s declining stature, check out jkOnTheRun’s post talking about Ryan Block’s open letter to Palm.

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