I found this interesting, so I posted it here. Since they won't be publically traded, I don't think there will be any visible effect to end users. It'll be interesting to see how this evolves.
Still, I don't see why they would do it because there are some tax disadvantages to the switch. The obvious answer is because they can generate more revenue and grow more under the new structure. Comments/insight?
Originally posted by CorajudoStill, I don't see why they would do it because there are some tax disadvantages to the switch.
Corporations are taxed on 40% on NET profit. If the corp makes $1 net, they owe $0.40. If they lose $10,000,000, they owe nothing.
I can't see why a corporation wouldn't want to generate more revenue, unless it was a non-profit that has trouble spending their revenue.
Since it's a subsidiary, they could setup another subsidiary as a loss leader to counter act the revenue realized by Firefox. Conversly, this new subsidiary could be the loss leader to counter act the revenue realized by the secondary pull-down search box to lower their tax libiality.
(edited by Zeruel on 5.8.05 1614)
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