Friday, January 25, 2013

Why Google Is Giving a Competitor $1 Billion

As usual, MG Siegler is worth reading in full. The subject: Google’s payment of $300 million a year, for three years, to Mozilla. An excerpt:

More than the revenue brought in from Firefox searches or the potential market share lost to Bing, Google wants to protect itself from the antitrust watchdogs as Chrome continues to grow.

Given the antitrust inquiries Google is currently undergoing, this theory is by no means crazy. In fact, if this isn’t a reason Google is doing the Mozilla deal, perhaps it should be.

Up until now, Google has been relatively safe in the browser space from an anti-competition perspective because unlike Microsoft (and Apple) they don’t control a desktop OS from which to distribute their browser by default. But increasingly, they have been using to try to get people to download Chrome. And if Chrome OS ever takes off, competition could become a real issue.

But even more pressing may be mobile. Right now, the browser on Android is seemingly just a generic browser. But increasingly, it’s sharing little bits here and there with Chrome. Soon, it will be Chrome.

That means that Google will have a dominant OS (Android) pushing Chrome by default. And that will cause the antitrust guys to perk up, just as IE bundled with Windows did for Microsoft years ago.

But if Google can point to a billion dollar commitment in (basically fully) supporting Mozilla and Firefox, perhaps it will negate the Chrome problem.

In a follow-up post, MG makes another brilliant point, this time, about the importance of Chrome to Google:

It’s true that Chrome isn’t a direct money-maker—you don’t pay for it—but it is one of the most efficient indirect money-makers ever created. Typing all but direct URLs into the Omnibox leads to a Google Search (yes, you can change it to another browser, but I would bet a tiny amount do). This leads to Google ads being shown. This leads to money being made.

Chrome is a Google Search machine, pure and simple.