Thursday, September 4, 2008

Chrome represents the start of the new browser wars

A version of this piece was published in Marketing in 2008

The only billionaire I know collects earthmoving equipment. A visit to his house could well involve digging huge holes in the grounds, or filling them in – for him it’s a contemplative process, and a chance to indulge the engineer in him.

I couldn’t help thinking of him when I read Google’s latest announcement – the launch of their own web browser. Google Chrome will compete in what’s beginning to look once more like an interesting market.

The earliest popular web browser was Netscape’s Mosaic, which burst on to the scene in 1994. Within a year, Microsoft had launched Internet Explorer 1.0 which it distributed for free, and the first browser war was under way. By 1997 it was all over and Microsoft’s Internet Explorer began its domination of the sector – leveraging the software giant’s huge distribution strength.

And it’s not until recently that anyone’s been able to challenge this.

Two things have changed since 1997 that have made this possible. The emergence of the open source software movement (where communities of developers cooperate to create software for the common good) challenged the supremacy of big software companies.

Linux in operating systems. Apache in web servers, MySQL in databases, PHP in web programming – these open source projects now dominate the web’s architecture, changing the business model fundamentally for giants like Microsoft, Sun, and IBM. But it isn’t just software for IT people – this has impacted on consumers too, as the not-for-profit Mozilla Foundation’s Firefox browser has reached 20% market share.

According to, Internet Explorer has fallen from 80% to 72% in the last 18 months, with almost all of this going to Firefox.

And if you install the Firefox browser on your computer, you’ll see a clue to what else has changed. Because integrated into the toolbar in Firefox is a search panel, which provides listings from Google.

Almost all of Mozilla’s income derives from this search panel – their deal with Google helped them earn $61m in 2006 (the last published accounts), since when their market share has rocketed.

Google know that loyalty to their brand is low. Web users will use what’s to hand – it’s why distribution is critical to the search giant’s success, and it’s why Microsoft’s first move as they launched into battle with Google for the search market was to build Windows Live search into Internet Explorer.

The official Google blog is pretty lukewarm about the new browser – “The web gets better with more options and innovations – Chrome is another option”. Hardly a ringing endorsement.

But one thing Chrome does do is tell Google what people are looking at – reporting back your surfing behaviour. It will add more suction to the data hoover that is Google and that may unsettle some.

But the real point of Chrome is a bigger one. The browser is the window not just onto the web, but on to all of the applications that reside there, from online storage (YoStore) to photo-sharing (flickr), word processing, spreadsheets (Google Docs). In the future, it’s believed, most computing power will reside online – accessed through a browser with little stored locally on our computers.

So browsers are a critical battleground for control of access to the future of computing and the internet, and Chrome’s features are designed to target this.

So whilst there’s little on the face of it that consumers can’t currently get from IE or Firefox, Chrome represents a more fundamental shift in direction. And because it’s open source, the development resource going into Chrome will boost progress of Firefox too.

Google are wealthy, and have a history of launching dozens of software plays and little history of making money out of them. But Chrome isn’t just a rich man’s hobby. It’s a sign that massive change is on the way for how we use the internet – a change that’s set to come at Microsoft’s cost.