Why I Was Wrong - Google's Chrome Was a Great Idea!

Sep 27, 2010

Google Chrome

A few days ago a former co-worker, Mike, and I met up and talked a bit about the state of the web, and this led into a discussion about what tools we were both using for development. Given that we were developing a Firefox plugin only a year ago I expected Mike to say that he used Firefox for everyday use, but I was surprised to find that he had switched to Google's Chrome for everyday use, as had I.

For years the rumors of a Google-branded browser ran rampant in the technology community, yet I scoffed that Google would get into the game. After all, why would it make sense for a company that largely built web applications (Google Desktop being on of the few exceptions) get into building desktop software? With Firefox, Safari, and Opera all pushing Internet Explorer, why would Google need to get into the game?

And yet 2 years ago Google launched their browser, Chrome, with fairly decent reviews and little fanfare. After all, the changes that Chrome brought to the table over competing Firefox and even Internet Explorer seemed minimal. Yet after using Chrome for a year or so, I've come to reevaluate my stance on the product itself, and the strategy behind it.

First, let's examine the strategy and the results have been for the browser. The state of the browser market when Google launched was Microsoft's Internet Explorer with roughly 70% browser share, Mozilla's Firefox with roughly 20%, and Safari with 5% or so (Opera and a few others made up the remaining set). Browsers are important strategically for a few reasons:

  1. Browsers control search share. This one was pretty close to my heart as someone that has worked in search, and the basic reasoning is distribution: lots of users perform web searches through the default search engine in their browser. If you can get the browser to ship with your search engine, you are going to have a lot more searchers.
  • Browsers determine what's possible on the web. Okay, this is a simplistic argument because what goes into a browser comes from standards bodies, and the actual applications are created by web developers, but the basic point is that a browser makes certain things possible for web developers

My initial thinking with Chrome is that Google would have a hard time getting users to change and use their browser. I mentally divided the browser market into two sets of users: power users, who were fairly loyal Firefox users with extensions and the like, and "ordinary" users, who would simply use the default that shipped with their machine: Internet Explorer. I figured if Internet Explorer users wouldn't switch to a significantly better Firefox, they'd be unlikely to switch to Google's Chrome.

But Google made a series of tactical choices in Chrome that I believe positioned them well:

  • Google forked open-source webkit as the rendering engine for Chrome, selecting it over the competing Gecko rendering engine that Firefox uses

  • Google introduced the browser for Windows initially, and then added Max and Linux versions

  • Chrome was initially distributed via their home page and other Google sites

  • Google pushed a "get out of the way" strategy, with the browser designed to take a back-seat to the actual web pages themselves. The browser's frame is called the "chrome", and "Chrome" gets it's "chrome" get out of the way

The first point, that Google chose webkit for Chrome, was a brilliant move because it positioned them well to pushing updates to the core rendering engine that powered the iPhone (as the browser on the iPhone, Safari, uses webkit for rendering). By making changes to the core code-base they then were able to add features that would work both on their mobile platform - Android - and the largest mobile threat, iPhone. That Research in Motion, makers of the blackberry, subsequently adopted webkit had to make this choice look all the more ingenious.

The second point was Google focused on getting real users, which turn into real dollars. Each user they were able to take away from Firefox was one fewer user that Google did not have to pay a revenue split for with the Mozilla foundation. To understand the economics of this it helps to understand how traffic acquisition costs (TAC) for search work. It turns out that most browser users search with the default box at the top of their browser, and this makes the distribution browsers have very valuable. The search companies compete with each other to bid for the right to have their engine as the default in the various browser makers out there, and then when those users search some percentage of the time they click on ads, and the revenue generated from the ads is split between the browser maker and the search engine. Let's take an example – if Firefox users search on Google and click $100M worth of ads annually, then Google and Mozilla will share that $100M between themselves at some split. It turns out because of the competitive nature of the business between search manufacturers that the split is actually quite favorable to the browser maker, so the Mozilla foundation may take home $75M (or even more!) of that $100M. But if Google can take users from Firefox to Chrome thats 75 cents on the dollar that Google now keeps for themselves.

The last point of brilliance I want to call attention to is the strategic point of pushing the other browser manufacturers to improve their products. Google makes web products, and part of their long-term strategy is to eat into the dominance of desktop products, like Microsoft Office. Currently a lot of their web products don't behave as smoothly as native desktop products, and some of that is because the current browsers don't have enough functionality to make really smooth desktop quality applications. Google has pushed the other browser manufacturers to iterate and add features to their products, which will result in better web applications for everybody. Yes, of course Microsoft can make great web products as well, but if you're a maker of web applications you are really happy the browser can do more.

When Google's Chrome came out I saw it as a minor product launch of a desktop that didn't make a lot of sense strategically. Two years later I realize I was very wrong: Chrome is a piece of brilliant business strategy and execution that has resulted in an excellent (and likely profitable) product!