Is E-texteditor's "open company" and open source model really open?

Question

E-Texteditor recently announced going open-source with their open company model. However after reading through I am not sure if this model is really open.

The way I understand is that they open up the source and contributors, depending on how much the contribute get badges (like at stackoverflow) and are compensated accordingly from the company's revenue stream. Here are the steps:

1st step: Releasing the source

The source will be made a available, so that users can study and modify the application for their own needs. If they want to contribute their changes back, they can submit them for review. To discourage piracy, a tiny but essential core (also containing the licensing code), will be kept private (at least until users reach a certain rating). This will gradually be followed by a similar opening of the rest of the company (web site, documentation, bug tracking, etc..)

2nd step: Building the Trust Metric

The basic infrastructure will be set up so that participants can start rating each other. The algorithms and code will be released as open source, so that they can be studied and discussed (and used by others). It will probably need quite some time and tweaking before we reach a fair balance.

3rd step: Compensating Participants

All income in the company (minus operating expenses), will be passed through the trust metric and distributed to participants.

The company still keeps some bits private to retain control and that doesn't make it truly open. How is that any different from hiring developers and compensating them with stock options and merit-based bonuses?

EDIT: David Brown points out the developer response

While the addition of the extra clause means that the license can no longer be termed an Open Source License, it is ideal for the open company. It is essentially an issue of mutual respect. If I fully respect your ownership, you will in return respect my right to make a living.

Answer 1

How is that any different from hiring developers and compensating them with stock options and merit-based bonuses?

I'd say the difference is that anyone can be an developer.

The company still keeps some bits private to retain control and that doesn't make it truly open.

Google Chrome is the same way. The actual open source part of it is a project called Chromium. Google takes contributions to the Chromium project, integrates it with the proprietary bits of Chrome, and releases it to the public.

It looks perfectly fine to me as an open source project. It's just not the traditional way of doing things.

EDIT: It appears the E developer has answered your question:

While the addition of the extra clause means that the license can no longer be termed an Open Source License, it is ideal for the open company. It is essentially an issue of mutual respect. If I fully respect your ownership, you will in return respect my right to make a living.

Answer 2

If the "essential core" prevent us from forking the project or creating a mac port, it's not really open source.