[nrc]

Major points: donations are used for projects working on things like web literacy, rather than on large engineering projects like Firefox. The more Mozilla get from donations, the less dependent on Google/Yahoo they have to be and thus they can be more independent - even fairly small absolute amounts will 'push the needle' here.

Minor point: I strongly contest that Mozilla is a wasteful company - salaries are low by large-tech-firm standards and spending (on travel, equipment, etc.) is fairly frugal. I have never heard of employees having almost work to do - it is nearly always the opposite. Travel is nearly always for coordinated team work since many employees and volunteers work remotely. For a (relatively) small budget, Mozilla produce an awful lot of results - the entire company is run on vastly less than the marketing budget (!) for Chrome, for example (sorry, can't find a source though).

[mcpherrinm]

The "marketing budget for Chrome" is something thrown around internally at Mozilla, but that number was pulled out of calculations on how much it would cost somebody else to advertise Chrome that google does on its own properties. Google does not have to charge itself to advertise itself.

[deciplex]

They have to give up the revenue advertising for someone else, to advertise for themselves.

[tempestn]

In theory; in practice most of the places where Chrome is advertised they wouldn't advertise a third-party product. (Like on the Google search engine homepage, for instance.) That said, I suppose they could be advertising a different internal product there, so there's certainly an opportunity cost regardless.