Front-End Book

No one, not even my wife, have missed that there is a new player on the browser scene, Google Chrome. Though we have different views on the topic, both me and my wife had the same questions and comments popping up.

• Why are they releasing a browser?
• If someone can gain market shares on the browser market, Google can.
• Is this a good or a bad thing?

Of course there are no definite answers to any of the questions, and I think they have the chance to gain market shares if they manage to make the integration with their services in such a way it feels natural to use Google Chrome instead of any other browser available (and fully functional).

But the big question is why they are releasing a browser and how it effects the end user.

I will try to reason around this issue, without getting into the conspiracy area (just touching it slightly).

In order to understand Google Chrome, we have to identify where Google have their biggest earnings and what focus Google have. Google focus on search and their income comes from a lot of different services both for end users and for businesses, with their biggest income generating from advertising. They are building a solid online office suite, Google Apps, and they probably make a dollar or two on other services as well, but the big thing is advertising. I believe that there are three main reasons Google have entered the browser market.

1. Increase Possibility to Target Ads

Google have strategically and slowly moved the positions when it comes to knowledge about user behaviour. In the beginning long time ago (10 years exactly), the user was “anonymous” and only shared entities such as geographic location, recurring visits, clickstreams etc etc, the ordinary web analytics stuff all websites without user accounts get by using Google Analytics.

Later Google Account was released via services such as GMail, Search History, iGoogle and other personalised services enabling Google to gather more data for business purposes such as ad targeting and personalised search results. With Accounts enabled on these services, Google could gather personalised data while using services where you needed to be logged in.

Google Toolbar was the next step in further evolving the possibility to gather personal data, but still Google only gathered information from people who actually installed a toolbar, I do not know the numbers, but I believe that the ratio may be pretty low. Still Google could increase the knowledge about those users, gathering information when surfing on other properties than Googles, but, and a big but is that they made this sharing of private material opt-in, and probably lost a lot of information that way.

By offering a browser, focused on usability, stability and ease-of-use, they will now target the really big audience, and they can hide the privacy issues in a EULA. By owning the browser chrome, they will gather enormous amounts of user data, making it easier to target people with ads contextually targeted both to content and user behaviour.

With their own browser, they can start showing targeted ads even on websites that do not affiliate through their Adsense program.

2. Remove Technical Barriers for Earning Money on Advertising

By owning the browser, Google can make sure that targeted ads do not get blocked. Maybe this is not a huge problem right now, but as a strategic decision, it is important, by trying to move the masses to start use Google Chrome, Google can be sure that whatever technical solution they choose for displaying the ads, they will know that ad impressions will be higher and given that, conversions will rise, and given that Google Inc. will earn more money.

3. Distribution Platform for Coming Services

Google Chrome is Googles iTunes. I believe Google are building a distribution platform, enabling them to start targeting new markets, where companies such as Apple, Amazon, Netflix, Rhapsody and other companies earning their revenues from micro-payments.

Google are going to increase the marginal for advertising revenue, but in order to really grow, as fast as we have gotten used to, they need to find new mass markets where they really can earn money from transactions. So believe me when I say that within a couple of months Google will start taking market shares from Apple and Amazon on digital items such as music, movies, applications for the web and Android.

Conclusion

Matt Cutts says that there are no hidden agenda behind this, they just wanna make the web a better place. If I where a share holder on Google I would not like those kind of arguments. “making the web better” is just that, an argument, not a strategy. And as a public company Google Inc. must find new ways to increase the market value of the company. I believe Google Chrome is the fundamental piece in Googles future platform taking market shares from competitors such as Apple, Netflix and likes as well as the Chrome will enable Google to increase the marginal on their advertising programs.