Digital Daily » IRS

What Was That You Were Saying About Mozilla Not Being an Arm of Google?

John Paczkowski — Thu, 20 Nov 2008 14:06:43 +0000

Mozilla renewed its search deal with Google (GOOG) last August, signing a three-year contract that ends in November 2011. Good thing too; the agreement was set to expire this month and if it had, Mozilla would have been forced to look elsewhere for the bulk of its income.

According to the organization’s latest audited financial statement, its revenue for 2007 totaled $75.1 million, up 13 percent from 2006’s $66.8 million. And 88 percent of that came came directly from Google, which pays Mozilla to be the default search engine in it Firefox browser.

So of Mozilla’s $75.1 million in 2007 revenue, $66 million was paid it by Google. That’s quite a sum. Large enough to pique the interest of the Internal Revenue Service, which is reviewing Mozilla’s nonprofit status and “challenging certain deductions,” according to Mozilla Foundation chairperson Mitchell Baker.

An interesting turn of events for Mozilla, which this time last year was claiming it would walk away from Google if that’s what it took to remain independent. “We’ve spent a lot of time and energy making sure that Google understands that it cannot turn us into an arm of Google,” Baker said at the time. “The things that make Mozilla and Firefox a success [are] the product, and the community that cares about it. First and foremost, we would protect those things,” Baker said. “If the protection of those things would come into conflict with Google, or any of our search partners, we would opt for the community who built Firefox and love Firefox…. There are other ways to make money from a browser.”

Good to know. Because you may need to pursue them when the IRS is through with you…

Do You Accept the iPhone as Your Personal Savior?

John Paczkowski — Mon, 25 Jun 2007 17:18:03 +0000

[ See post to watch video ]

You've Found a Golden Runic Hammer! Click Here to Complete Your 1099 …

John Paczkowski — Mon, 25 Jun 2007 08:39:54 +0000

With millions of dollars in virtual currency changing hands each month in simulated worlds like EverQuest and Second Life, there are increasing reports of virtual-world moguls amassing real-world riches and scholars warning that these online worlds could be the “21st century’s equivalent of hiding funds offshore.” So it may be only a matter of time before tax authorities open a virtual office or two. And in the not-too-distant future, they may.

Congress’ Joint Economic Committee is expected to issue a report on the potential taxation of virtual goods by the end of July. No word yet on what it might say, although a JEC director has suggested that “as long as virtual activity stays within the virtual economy, it shouldn’t be taxable.” So is that to say that there are tax consequences for activity that extends beyond it? Sounds like it. “Any time someone wins a tangible prize or award, the value is reportable as taxable income,” an Internal Revenue Service rep told CNN earlier this year. “An accumulation of ‘points’ would not result in tax consequences, but redeeming or selling them for money, goods, or services would.”