Mozilla has IRS breathing down its Google branded neck

With the release of the Mozilla Foundation’s 2007 financial report, questions have been raised by the IRS who are due to perform an audit on the non-profit organisation behind the massively popular Firefox browser.

Last year the Foundation received $66 million of its total $75 million revenue (88 percent) from search engine maestro’s Google, so the IRS are looking for blood over the organisations tax exempt status. Back in 2006, Mozilla got $59.5 million from Google – around 85 percent of the organisations revenue.

Google and Mozilla are part of a “you scratch my back, I’ll pay your bills” sort of agreement with the Google search bar firmly placed in the toolbar, and on the default homepage. Things were a bit rocky a couple of months back when Google unveiled the Beta-run of its Chrome browser, but Mozilla and Google hugged it out and sealed a deal that will last for a further three years. That deal will expire in November 2011.

In 2003, Mozilla received tax exempt status, which meant it didn’t pay any taxes in 2004’s revenue of $4,422,674. The organisation said the agreement with ‘a search provider’, “facilitates the dissemination of the Foundation’s browser, thereby increasing the accessibility of the internet.” Do I know exactly what they mean by that? Well not really if you must know.

In 2005, Mozilla created a for-profit operation, whereby multiple search engine contracts were transferred to the new Mozilla Corporation. When they made the change, Mozilla say they have a “tax reserve fund” set aside in-case the IRS come looking for the tax from 2004/05 – which they are.

The IRS has stated that they are launching a review: “We are early in the process and do not yet have a good feel for how long this will take or the overall scope of what will be involved.”

In the finance report, Mozilla claim that its search revenues should be classed as royalties, and therefore not be taxed, however, they are well aware that the IRS could see things differently. Mozilla has a bit of spare cash in its tax reserve - $14,832,000 at the end of 2007.

The report also says that an inquiry into the organisations tax exemption has begun due to Google supplying a large chunk of the Foundation’s revenue.

“While the Foundation did not automatically qualify as a public charity with public support at 33 per cent of total support, it believes that it qualifies as a public charity under the facts and circumstances test with public support over 10 per cent,” said the report

If the IRS finds Mozilla hs not been taxed correctly, the organisation says it will become a private charity, and release around 100,000 in taxes.

Resource - Linux Solutions

Mozilla to end support for Firefox 2

The Mozilla Foundation is planning to end support for the Firefox 2 browser in mid-December, despite the persistence of significant flaws in the most-recent version of the popular browser.

The 'end of life' (EOL) plan for Firefox 2 is part of Mozilla's policy of ending support for previous versions of a product six months after a new version's release. It is designed to allow Mozilla developers to focus their efforts on the current browser version, Firefox 3, released in mid-May.

For users, the policy means an end to security and stability updates for the existing versions, as well as an end to releases of new features.

Support will also cease for the Gecko 1.8 layout engine that underlies both Firefox 2 and the Thunderbird 2 email client. The move will affect a range of third-party Gecko-based browsers, such as SeaMonkey, the Mac-only Camino and the Unix/Linux browser Galeon.

Mozilla confirmed the move on the web page devoted to older versions of its software, stating: "Firefox 2.0.0.x will be maintained with security and stability updates until mid-December, 2008. All users are strongly encouraged to upgrade to Firefox 3."

Mozilla is pressing on with the transition despite criticisms of Firefox 3 from some quarters, including some organizations that have found the newer browser unusable due to particular bugs. Some users have noted that Firefox 3 appears to be more prone to crashing than the older browser, and has problems with using too much memory. The browser's new location bar has also come in for criticism. Earlier this month, a system administrator for the University of Bergen commented that a bug related to the use of network drives had meant the organization could not install Firefox 3.

Firefox 2 is still receiving significant numbers of bug-fixes in new releases. Last week, Mozilla released Firefox 2.0.0.18 and Firefox 3.0.4, addressing a dozen security flaws, half of which were ranked as critical. Mozilla's current plan is to release only one more update to Firefox 2, version 2.0.0.19.

Mozilla assured developers that support would continue for Thunderbird 2 past December, despite the fact that it is based on the now-outmoded Gecko 1.8 engine.

"Mozilla (in some form) will provide support for Thunderbird based on the official lifecycle policy," said Mozilla's Michael Connor in a recent message to the Mozilla planning mailing list.

The support situation for third-party browsers based on Gecko 1.8 is more ambiguous, according to Firefox director Mike Beltzner. While he acknowledged that Mozilla developers' focus would no longer be on Gecko 1.8, he said third-party developers would still be free to maintain the software and fix bugs.

"EOL doesn't mean 'everyone stop coding and doing reviews', more that 'we don't have a team doing weekly triage on blockers and milestone releases'," Beltzner wrote in a recent Mozilla mailing list post.

In October, Beltzner said two-thirds of Firefox users were already using version 3. Mozilla set a world’s record for its more than eight million downloads of Firefox 3 in June.

Resource - ZDNet