Will Success, or All That Money From Google, Spoil Firefox?

Only a couple of years ago, Firefox was the little browser that could — an open-source program created by thousands of contributors around the world without the benefit of a giant company like Microsoft to finance it.

Since then, Firefox, which has prospered under the nonprofit Mozilla Foundation, has grown to be the largest rival to Microsoft’s Internet Explorer, with 15 to 20 percent of the browser market worldwide and higher percentages in Europe and among technology devotees. It is the most popular alternative browser since Netscape.

In trying to build on this success, the Mozilla Foundation has come to resemble an investor-backed Silicon Valley start-up more than a scrappy collaborative underdog ... The foundation has used a for-profit subsidiary, the Mozilla Corporation, to collect tens of millions of dollars in royalties from search engine companies that want prominent placement on the browser. And by collecting that money as a war chest to compete against giants like Microsoft and Apple, the foundation has, at least temporarily, moved away from the typical activities of a nonprofit organization.

According to Mozilla’s 2006 financial records, which were recently released, the foundation had $74 million in assets, the bulk invested in mutual funds and the like, and last year it collected $66 million in revenue. Eighty-five percent of that revenue came from a single source — Google, which has a royalty contract with Firefox.

Despite that ample revenue, the Mozilla Foundation gave away less than $100,000 in grants (according to the audited statement), or $285,000 (according to Mozilla itself), in 2006. In the same year, it paid the corporation’s chief executive, Mitchell Baker, more than $500,000 in salary and benefits. (She is also chairwoman of the foundation.)

Ms. Baker says it was the community, not Google’s money, that made Firefox a player in the field. “Mozilla is successful because we have this giant set of people who care about it,” she said. “The fundamental infrastructure piece that keeps Mozilla independent from even a single source of income like Google is the diverse set of people.”