Revenue growth at Firefox-owner The Mozilla Foundation is slowing. Chairwoman Mitchell Baker said in her annual “state of Mozilla” letter that the foundation’s revenue—which it generates primarily from its deal to make Google (NSDQ: GOOG) the default search engine on its browser—increased five percent year-over-year. That, however, includes heavy losses at the foundation’s investment portfolio. Net income, which Mozilla refers to as change in net assets, also shrunk substantially, as it bulked up on its software development spending.

It was a big year for the Foundation which released Firefox 3.0 in 2008 (That’s since been followed up by the release of the speedier 3.5 this summer). In her letter, Mitchell notes that Firefox’s market share keeps increasing—and has reached 20.2 percent in the U.S. and 32 percent in Europe.

On a related note, Baker tells CNET that—unlike Google, which is building an operating system based on its Chrome browser—the foundation has no plans to build an operating system of its own. “We’re really focused on making the Web the right platform of whatever operating system one is using,” she says.

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