By Nick Farrell
20 November 2008, 3:00 PM

THE MOZZERELLA Foundation has revealed that if Google backs out of its arrangements in favour of its own browser, the Open Sauce outfit will be toast. In its financial statement for 2007, the foundation said that while revenues for the organisation behind the open-source Firefox browser were up 12 percent to $75 million, the company was making most of its cash from search-related royalties from Google.

This made 88 percent of the total, or $66 million while another $2 million or so came from other search engines. What must be alarming for the bean counters is that Google's overall percentage of Mozilla’s revenues is even bigger than it was in 2006, when it accounted for 85 percent.While Mozilla has three years worth of contract with Google left to run, it does put the Open Sauce browser in a vulnerable position. What could trigger Google falling out of love with the Open Sauce outfit? Mozilla is being audited by the IRS and its non-profit status is in question.

It is arguing that the cash it collects from Google should be treated as royalties, and thus not count as revenues under the tax code. If it loses its status it will have to stump up an extra $100,000 for tax and be classed as a private foundation. While that will not cost it much, if Google has been claiming tax relief on the money that it gives Mozzarella it will cost the search empire a lot of dosh in tax relief. This might encourage it to develop Chrome.