Firefox usage is down 85% despite Mozilla's top exec pay going up 400%
Mozilla is in an absolute state: high overheads, falling usage of Firefox, questionable sources of revenue and now making big cuts to engineering as their income falls.
Mozilla recently announced that they would be dismissing 250 people. That's a quarter of their workforce so there are some deep cuts to their work too. The victims include: the MDN docs (those are the web standards docs everyone likes better than w3schools), the Rust compiler and even some cuts to Firefox development. Like most people I want to see Mozilla do well but those three projects comprise pretty much what I think of as the whole point of Mozilla, so this news is a big let down.
The stated reason for the cuts is falling income. Mozilla largely relies on "royalties" for funding. In return for payment, Mozilla allows big technology companies to choose the default search engine in Firefox - the technology companies are ultimately paying to increase the number of searches Firefox users make with them. Mozilla haven't been particularly transparent about why these royalties are being reduced, except to blame the coronavirus.
I'm sure the coronavirus is not a great help but I suspect the bigger problem is that Firefox's market share is now a tiny fraction of its previous size and so the royalties will be smaller too - fewer users, so fewer searches and therefore less money for Mozilla.
The real problem is not the royalty cuts, though. Mozilla has already received more than enough money to set themselves up for financial independence. Mozilla received up to half a billion dollars a year (each year!) for many years. The real problem is that Mozilla didn't use that money to achieve financial independence and instead just spent it each year, doing the organisational equivalent of living hand-to-mouth.
Despite their slightly contrived legal structure as a non-profit that owns a for-profit, Mozilla are an NGO just like any other. In this article I want to apply the traditional measures that are applied to other NGOs to Mozilla in order to show what's wrong.
These three measures are: overheads, ethics and results.
One of the most popular and most intuitive ways to evaluate an NGO is to judge how much of their spending is on their programme of works (or "mission") and how much is on other things, like administration and fundraising. If you give money to a charity for feeding people in the third world you hope that most of the money you give them goes on food - and not, for example, on company cars for head office staff.
Mozilla looks bad when considered in this light. Fully 30% of all expenditure goes on administration. Charity Navigator, an organisation that measures NGO effectiveness, would give them zero out of ten on the relevant metric. For context, to achieve 5/10 on that measure Mozilla admin would need to be under 25% of spending and, for 10/10, under 15%.
Senior executives have also done very well for themselves. Mitchell Baker, Mozilla's top executive, was paid $2.4m in 2018, a sum I personally think of as instant inter-generational wealth. Payments to Baker have more than doubled in the last five years.
As far as I can find, there is no UK-based NGO whose top executive makes more than £1m ($1.3m) a year. The UK certainly has its fair share of big international NGOs - many much bigger and more significant than Mozilla.
I'm aware that some people dislike overheads as a measure and argue that it's possible for administration spending to increase effectiveness. I think it's hard to argue that Mozilla's overheads are correlated with any improvement in effectiveness.
Mozilla now thinks of itself less as a custodian of the old Netscape suite and more as a 'privacy NGO'. One slogan inside Mozilla is: "Beyond the Browser".
Regardless of how they view themselves, most of their income comes from helping to direct traffic to Google by making that search engine the default in Firefox. Google make money off that traffic via a big targeted advertising system that tracks people across the web and largely without their consent. Indeed, one of the reasons this income is falling is because as Firefox's usage falls less traffic is being directed Google's way and so Google will pay less.
There is, as yet, no outbreak of agreement among the moral philosophers as to a universal code of ethics. However I think most people would recognise hypocrisy in Mozilla's relationship with Google. Beyond the ethical problems, the relationship certainly seems to create conflicts of interest. Anyone would think that a privacy NGO would build anti-tracking countermeasures into their browser right from the start. In fact, this was only added relatively recently (in 2019), after both Apple (in 2017) and Brave (since release) paved the way. It certainly seems like Mozilla's status as a Google vassal has played a role in the absence of anti-tracking features in Firefox for so long.
Another ethical issue is Mozilla's big new initiative to move into VPNs. This doesn't make a lot of sense from a privacy point of view. Broadly speaking: VPNs are not a useful privacy tool for people browsing the web. A VPN lets you access the internet through a proxy - so your requests superficially appear to come from somewhere other than they really do. This does nothing to address the main privacy problem for web users: that they are being passively tracked and de-anonymised on a massive scale by the baddies at Google and elsewhere. This tracking happens regardless of IP address.
When I tested Firefox through Mozilla VPN (a rebrand of Mullvad VPN) I found that I could be de-anonymised by browser fingerprinting - already a fairly widespread technique by which various elements of your browser are examined to create a "fingerprint" which can then be used to re-identify you later. Firefox does not include as many countermeasures against this as some other browsers (this is a correction - I previously said Firefox contained none but it's been pointed out to me that since earlier this year it does block some kinds of fingerprinting).
Another worry is that many of these privacy focused VPN services have a nasty habit of turning out to keep copious logs on user behaviour. A few months ago several "no log" VPN services inadvertently released terabytes of private user data that they had promised not to collect in a massive breach. VPN services are in a great position to eavesdrop - and even if they promise not to, your only option is to take them at their word.
I've discussed the Mozilla chair's impressive pay: $2.4m/year. Surely such impressive pay is justified by the equally impressive results Mozilla has achieved? Sadly on almost every measure of results both quantitative and qualitative, Mozilla is a dog.
Firefox is now so niche it is in danger of garnering a cult following: it has just 4% market share, down from 30% a decade ago. Mobile browsing numbers are bleak: Firefox barely exists on phones, with a market share of less than half a percent. This is baffling given that mobile Firefox has a rare feature for a mobile browser: it's able to install extensions and so can block ads.
Yet despite the problems within their core business, Mozilla, instead of retrenching, has diversified rapidly. In recent years Mozilla has created:
- a mobile app for making websites
- a federated identity system
- a large file transfer service
- a password manager
- an internet-of-things framework/standard
- an email relay service
- a completely new phone operating system
- an AI division (but of course)
- and spent $25 million buying the reading list management startup, Pocket
Many of the above are now abandoned.
Sadly Mozilla's annual report doesn't break down expenses on a per-project basis so it's impossible to know how much of the spending that is on Mozilla's programme is being spent on Firefox and how much is being spent on all these other side-projects.
What you can at least infer is that the side-projects are expensive. Software development always is. Each of the projects named above (and all the other ones that were never announced or that I don't know about) will have required business analysts, designers, user researchers, developers, testers and all the other people you need in order to create a consumer web project.
The biggest cost of course is the opportunity cost of just spending that money on other stuff - or nothing: it could have been invested to build an endowment. Now Mozilla is in the situation where apparently there isn't enough money left to fully fund Firefox development.
Mozilla can't just continue as before. At the very least they need to reduce their expenses to go along with their now reduced income. That income is probably still pretty enormous though: likely hundreds of millions a year.
I'm a Firefox user (and one of the few on mobile, apparently) and I want to see Mozilla succeed. As such, I would hope that Mozilla would cut their cost of administration. I'd also hope that they'd increase spending on Firefox to make it faster and implement those privacy features that other browsers have. Most importantly: I'd like them to start building proper financial independence.
I doubt those things will happen. Instead they will likely keep the expensive management. They have already cut spending on Firefox. Their great hope is to continue trying new things, like using their brand to sell VPN services that, as I've discussed, do not solve the problem that their users have.
Instead of diversifying into yet more products and services Mozilla should probably just ask their users for money. For many years the Guardian newspaper (a similarly sized organisation to Mozilla in terms of staff) was a financial basket case. The Guardian started asking their readers for money a few years ago and seems to be on firmer financial footing since.
Getting money directly has also helped align the incentives of their organisation with those of their readers. Perhaps that would work for Mozilla. But then, things are different at the Guardian. Their chief exec makes a mere £360,000 a year.
Other charities with cost control problems
Another notable technology NGO with huge expenses is The Wikimedia foundation. You can read more about their problems in Wikipedia has Cancer which uses a very dodgy metaphor but is otherwise a good study of incredible spending growth there. Wikimedia has the advantage over Mozilla that all contributors to its main project are unpaid - which only makes the expenses all the more mindblowing. Wikimedia, like Mozilla, has had a lot of side projects. At one point they were trying, in secret, to build a whole new search engine.
A good example of a charity that shut down due to poor expense control is Kids Company, a British charity for helping vulnerable children. The Kids Company debacle shows that shutdown can be quite abrupt. The British government provided most of the funding but (eventually) lost faith and ceased their annual grant which resulted in the charity being immediately liquidated. A House of Commons committee released a good report.
Sources I used
Mozilla's legal structure as a non-profit that owns a for-profit arm makes their government filings ("Form 990"s) of pretty limited use as they aren't consolidated and don't contain any information about the majority of Mozilla activities. The most useful thing about these documents is that people who are on the board of the parent have to disclose pay from the subsidary (in Part IX, generally on page 10). Propublica have a complete set.
More useful is Mozilla's annual report, which is consolidated. I haven't been able to find a master index of these but you can get there via the "State of Mozilla" pages - you'll need to edit the year in the url to get previous annual reports.
I used statcounter's usage data. I haven't included any 2020 data as the year isn't out yet but it's even worse than 2019 for Firefox.