“The current Microsoft announcement is too little, too late. Such a move would have been appropriate in 1997, but further action is needed to undo the effects of a decade of abuse,” said Thomas Vinje, spokesman for the anti-Microsoft lobby European Committee for Interoperable Systems. “Microsoft must give users real choice, and this should include not just buyers of new computers, but also existing users.” And just what is Vinje’s idea of “real choice”? Ballot screens offering a choice of at least five preloaded browsers for buyers of new PCS as well as Microsoft’s installed base of Windows users, via Windows and IE updates.

Mitchell Baker, Chair of the Mozilla Foundation, took a similarly dim view of Microsoft’s (MSFT) plans for European versions of Windows, questioning the company’s motives and wondering if it might not intend to somehow give PC makers an incentive to bundle IE back into Windows at the OEM level. “It’s impossible to evaluate what this means until Microsoft describes–completely and with specificity–all the incentives and disincentives applicable to Windows OEMs,” she wrote in a blog post. “Without this it’s impossible to tell if Microsoft is giving something with one hand and taking it away with the other. For example, if Windows marketing dollars are tied to IE or browser-based programs, then the ties to Windows are still distorting the browser market. One could think of many other examples. As a result, it’s also impossible to tell whether this does anything more than change the technical installation process of the OEMs.”

Baker did, however, concede that Microsoft’s solution will achieve one thing: annoying the hell out of Windows users abroad. “It will certainly make life more difficult for people upgrading to Windows 7,” she said.

Mozilla is not only adding its voice to that of European antitrust regulators who claim Microsoft’s (MSFT) bundling of IE with its Windows OS is anticompetitive, but offering its counsel as well. In a post to the Mozilla blog last weekend, Mozilla Corporation CEO Mitchell Baker said that she had “not the single smallest iota of doubt” that the European Commission’s preliminary conclusion that “Microsoft’s tying of Internet Explorer to the Windows operating system harms competition between Web browsers” is correct. “I’ve been involved in building and shipping Web browsers continuously since before Microsoft started developing IE, and the damage Microsoft has done to competition, innovation, and the pace of the Web development itself is both glaring and ongoing,” Baker wrote. “There are separate questions of whether there is a good remedy, and what that remedy might be. But questions regarding an appropriate remedy do not change the essential fact. Microsoft’s business practices have fundamentally diminished (in fact, came very close to eliminating) competition, choice and innovation in how people access the Internet.”

A brutal attack and one that’s apparently only just beginning. Baker concluded her missive by volunteering Mozilla’s advice on potential remedies. “I’d like to offer Mozilla’s expertise as a resource to the EC as it considers what an effective remedy would entail,” she writes. “I’ll be reaching out to people I know with particular history, expertise and ideas regarding these topics.”

A bit like Muhammad Ali offering tips on how to score his historic fights with Joe Frazier, no? Anyway… the EC has reportedly accepted Mozilla’s offer and will allow it to participate in the case as an “interested party.”

A note about the headline: It’s a joke. I am well aware of FTP and KDE, Gnome, etc. and their non-IE browsers. No need for lectures.

[Image Credit: DeviantART/letitbeatles]

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…

Turns out, that number probably wasn’t too far off. According to an independent auditor’s report, Mozilla made $66.8 million in revenue in 2006, quite a bit of it from Google (GOOG). As former Mozilla Corp. CEO Mitchell Baker explained in a post to MozillaZine:

As in 2005 the vast majority of this revenue is associated with the search functionality in Mozilla Firefox, and the majority of that is from Google. The Firefox user base and search revenue have both increased from 2005. Search revenue increased at a lesser rate than Firefox usage growth as the rate of payment declines with volume. Other revenue sources were the Mozilla Store, public support and interest and other income on our assets.”

But those “other revenue sources” are piddling in comparison to Google’s contribution, which apparently accounts for a full 85% ($56 million or so) of Mozilla’s revenues.

So it’s supremely ironic then to hear Mozilla CEO John Lilly criticize Apple (AAPL) for distributing its Safari browser for Windows and OS X through its Software Update utility. “What Apple is doing now with their Apple Software Update on Windows is wrong,” Lilly said in a blog post on Friday. “It undermines the trust relationship great companies have with their customers, and that’s bad–not just for Apple, but for the security of the whole Web. … Apple has made it incredibly easy– he default, even–for users to install ride-along software that they didn’t ask for, and maybe didn’t want. This is wrong, and borders on malware distribution practices. It’s wrong because it undermines the trust that we’re all trying to build with users. Because it means that an update isn’t just an update, but is maybe something more. Because it ultimately undermines the safety of users on the Web by eroding that relationship. It’s a bad practice and should stop.”

Now, Lilly may have a point. But he’s hardly the best guy to be making it. As ZDnet’s Larry Dignan notes, Safari–like Firefox–features a Google search box, for which the search giant also presumably pays a placement fee. A sudden gain in market share for Safari at Firefox’s expense could have financial implications for Mozilla. “Let’s say Safari grabs 10% market share and Firefox falls to about 25%,” Dignan writes. “That’s fewer searches and less revenue for Mozilla. Sure, you can argue about whether Apple’s Safari move is above the board. You can also question the security implications and a bevy of other issues. But in the end, Apple’s Safari update and Mozilla’s reaction is like any other story. To truly understand it you have to follow the money.”

UPDATE: John Lilly wrote to me earlier today with a few comments about this post. Here’s what he had to say:

Hi John –

Wanted to follow up on your post just now about us and Apple and Google.

Take this for whatever it’s worth, but revenue and market share didn’t enter my mind when I posted. At Mozilla we obviously care about having enough resources to keep the lights on and pay people, and we care about having enough market share–because it means that we’ve built products that people really care about.

But competition is good and healthy, and essential. Without competition we’d all be in a pretty bad world–sort of like AT&T in the bad old days.

I’ve got zero issues with Apple using their channel to distribute other products–I think that’s a perfectly fine thing for them to do. What I worry about is that users need to trust the security updates they get from their vendors–because if they don’t–if they think there’s an ulterior motive other than keeping software up-to-date–that’s a problem for everyone.

Anyway, I respect your right to write what you think and to be skeptical of the motives of folks like me, but I do say sincerely that in this case, revenue has nothing to do with it.”