Breaking: Mozilla changes strategy, focuses on Firefox and AI

It has been less than a week since the new interim CEO took over the reigns from long-time Mozilla CEO Mitchell Baker. Today news broke that Mozilla is changing its product strategy going forward.

The organization plans to focus on bringing "trustworthy AI into Firefox" and to scale back some of its other products and services.

Affected products include Mozilla VPN, Firefox Relay, and Online Footprint Scrubber. The organization will also reduce investments in its Mastadon instance. These products are not going away. Mozilla will shut down some of its products next to that. First product to receive the ax is Hub, a 3D virtual world that Mozilla launched several years ago.

Mozilla explains in an internal memo that it is reducing investments in "market segments that competitors crowd and where it is challenging to deliver a differentiated offering".  The VPN niche, for instance, is very competitive. Hundreds of companies fight for market share and there are several good options for privacy conscious users, including Mullvad, which Mozilla VPN is based on.

About 60 employees in the "People Team" are laid off as a consequence of the restructuring.

Mozilla plans to keep investing in products and services, but only "in products addressing customer needs in growing market segments".

The organization's focus will be on Firefox going forward. More precisely, on bringing "trustworthy AI into Firefox". For this, Mozilla is "bringing together Pocket, Content, and the AI/ML teams supporting content with the Firefox Organization".

Google dependence

For much of its history, Mozilla relied on search engine deals for funding. Companies like Google pay Mozilla millions to make their search engines the default search tool in the browser.

This dependence, in the case of Google to a direct competitor, needed to be reduced. The idea was born to create standalone security and privacy products. Some of these were released for free, others as subscription-based products.

Mozilla managed to reduce its dependency on search engine deals in the past couple of years. The organization made about $600 million in revenue in 2022, the last published report year. About $510 million came from royalties, which are search engine deals. While income from royalties is falling, it is still the major source of revenue for Mozilla.

Subscription and advertising revenue made a jump from $56 million in 2021 to $75 million in 2022. Even with continued investments, it would take decades before this segment would overtake royalties as the main revenue driver.

Closing Words

Focus on Firefox is something that many Firefox users wanted to hear for a long time. While Mozilla never abandoned the browser, it looked as if it put much of its focus on other products and services.

Introduction of AI into Firefox is not necessarily a bad thing, especially if Mozilla keeps it promise that the integrated AI is trustworthy and privacy friendly.

Engineers at Mozilla already dipped their toes into local AI products. Called Memory Cache, it is an AI that runs locally only. One major distinguishing factor between Memory Cache and the ChatGPTs, Copilots, and Google Geminis is that it is not trained on large datasets. Instead,

Memory Cache is trained on files the users gives it access to.

Here is the full Mozilla memo:

Scaling back investment mozilla.social: With mozilla.social, we made a big bet in 2023 to build a safer, better social media experience, based on Mastodon and the Fediverse. Our initial approach was based on a belief that Mozilla needed to quickly reach large scale in order to effectively shape the future of social media. It was a noble idea but one we struggled to execute. While we resourced mozilla.social heavily to pursue this ambitious idea, in retrospect a more modest approach would have enabled us to participate in the space with considerably greater agility. The actions we’re taking today will make this strategic correction, working through a much smaller team to participate in the Mastodon ecosystem and more rapidly bring smaller experiments to people that choose to live on the mozilla.social instance.

Protection Experimentation & Identity (PXI): We’re scaling back investment in some of our standalone consumer products in the Security and Privacy space. We are reducing investment in market segments that competitors crowd and where it is challenging to deliver a differentiated offering. Specifically, we plan to reduce our investments in VPN, Relay, and Online Footprint Scrubber. We will maintain investment in products addressing customer needs in growing market segments.

Hubs: Since early 2023, we have experienced a shift in the market for 3D virtual worlds. With the exception of gaming, education, and a handful of niche use cases, demand has moved away from 3D virtual worlds. This is impacting all industry players. Hubs’ user and customer bases are not robust enough to justify continuing to dedicate resources against the headwinds of the unfavorable shift in demand. We will wind down the service and communicate a graceful exit plan to customers.

Right-sizing the People Team
Given the reduction in staffing and lower headcount budget moving forward in MozProd, some roles have been consolidated in the People and other support services orgs so that we are offering the right level of support to our product portfolio. Optimizing our org to sharpen focus.

In 2023, generative AI began rapidly shifting the industry landscape. Mozilla seized an opportunity to bring trustworthy AI into Firefox, largely driven by the Fakespot acquisition and the product integration work that followed. Additionally, finding great content is still a critical use case for the internet. Therefore, as part of the changes today, we will be bringing together Pocket, Content, and the AI/ML teams supporting content with the Firefox Organization. More details on the specific organizational changes will follow shortly. Within MozProd, there are no changes within MDN, Ads, or Fakespot. There are also no changes to Legal/Policy, Finance & Business Operations, Marketing, or Strategy & Operations.

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