Startup Looks To Build Business Around Firefox

With no products of its own yet, the Palo Alto, Calif.-based, company introduced itself to the public by unveiling its corporate website and announcing that it would assist developers of several Firefox add-ons currently available, including FlashGot, Bandwidth Tester and SwitchProxy. All of the software can be downloaded from the Round Two site.

Round Two, comprised of four fulltime employees and 10 contractors, hasn't landed any venture capital money, Bart Decrem, co-founder and chief executive of the company, said. The company, however, plans to announce some outside funding in a couple of weeks.

Before Round Two, Decrem led marketing and business affairs for the Mozilla Foundation, which controls development of Firefox. The open-source browser has been slowly growing in use, grabbing a few percentage points of market share from Microsoft Corp.'s Internet Explorer, which has nearly 90 percent of the market.

Since its release, Firefox 1.0 has been downloaded 44 million times, according to Mozilla, creating a potential customer base that's sufficient to support an ambitious startup, Decrem said.

"We believe that you can actually build a business on 44 million users," Decrem said. "We believe that Firefox is already tremendously successful, and will continue to be successful over time."

Round Two plans to deliver services and software that would turn Firefox into a kind of web portal that would operate in a similar way to Yahoo Inc., Microsoft's MSN and Google Inc. All three sites offer services for blogging, social networking, email, e-commerce and more.

"Firefox today is a blank slate," Decrem said. "What we're trying to do is move it toward becoming a social browser, where it knows everything about you -- your social network, the sites that you're interested in -- and uses the information to help you find and complete transactions. But it places you at the center, and lets you control your information.

"We believe that's the future of the web-browser experience."

Robert Lerner, analyst for market researcher Current Analysis, said Round Two's vision is plausible.

"In principle, it certainly sounds good," Lerner said.

Round Two's success, however, depends on consumers continuing to adopt Firefox in greater numbers. The pace of adoption, while still growing, has recently slowed.

Nevertheless, Lerner compared the browser's growth to Linux, the open-source operating system that has taken years to become a threat to Microsoft's Windows.

"Will Firefox be the Linux of browsers? I don't know," Lerner said. "But it is growing, and getting a lot of attention."

In February, Firefox's global usage stood at 8.45 percent while IE had 87.28 percent of the market, according to web-analytics company OneStat.com. Rival WebSideStory.com has put Firefox's share at 5.69 percent and IE at 89.85 percent.

Though confident of Firefox's future, Decrem acknowledges that his company is tied to the browser's success.

"That is the bet," Decrem said.

Round Two's first product is expected to be anti-virus software that is scheduled to ship in about a month. No timetable for other products has been disclosed.

In the meantime, the company will provide money, technical assistance and hosting services to the developers of selected Firefox add-ons. Collectively, add-ons supported today are downloaded 300,000 times a week, according to Decrem.

Supporting the most popular add-ons will help Round Two build strong ties with the developers, and give it an opportunity to market its brand with the software, Decrem said.