OK, that may be a bit melodramatic, but there are two interesting and complementary bits of news:

The Mozilla Foundation was announced as a non-profit that will be the new home for Mozilla. AOL has donated $2 million for start-up funding, and various other companies have announced plans to support it.

AOL is dismantling Netscape. Some people are being laid off, others are being reassigned. Many of them intend to keep working on Mozilla, either for the Mozilla Foundation or on a volunteer basis. Heck, Dave Hyatt has kept contributing despite working on Safari for Apple, and I’m fairly certain I’ve seen Ian “Hixie” Hickson on Bugzilla since he started at Opera.

Pros: Mozilla will be fully independent. No more choosing the lesser of two evils (Microsoft vs. AOL)! The last few versions of Netscape have been pretty redundant anyway, and Mozilla has been making a name for itself over the past year.

Cons: Certain drop in funding, possible drop in confidence, likely drop in visibility (or at least name recognition). Mozilla’s already going through a transition period in terms of the project architecture (from monolithic suite to separate components using a common base). And news sources that don’t understand the implications of open source, or don’t connect the first announcement with the second, are going to assume Mozilla is disappearing as well.

Other projects (Apache, Gnome, KDE, and of course Linux) have shown that you can keep a resource-intensive open-source project going. I don’t know how rough the transition will be, but I have no doubts that Mozilla can keep going.