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Google’s Chrome Saturating an Already Crowded Browser Market

by: Brian Bober September 03, 2008 | about stocks: GOOG    

Brian Bober

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From the blogesphere to the traditional news media, everyone seems ecstatic about Google’s (GOOG) new browser, Chrome. Some are even proclaiming that it will overtake Windows (MSFT) and be the next major operating system. When so many smart people fall over themselves to hype a product still in development, I tend to try to view things from the other side. For the Chrome browser there are a lot of important questions that no one seems to be asking. Like what special capabilities is Google bringing to the crowded browser market?

Open Standards

Everyone is proclaiming how great this will be that we will have an open source browser. The thing is, there is already a great open source browser: Mozilla’s Firefox. It is debatable how much is gained from open sourcing the browser’s code. What is important is, how will this browser support open standards? Since so many websites were not initially implemented to fully support the W3C Standards (the international organization that defines the internet’s standards) will Chrome be able to correctly render 99% of websites, as claimed, while also fully supporting open standards?

Innovator’s Dilemma

Balancing support for innovation and new standards with support for legacy applications and standards is a monumental task that should not be taken lightly. Legacy support is what gives Microsoft Windows its monopoly, but it also acts as a yoke on innovation. Microsoft has a better operating system than Vista; they just cannot figure out how to roll it out.

Microsoft’s Internet Explorer is in a similar boat. It has been estimated that over 50% of IE’s code base is error handling and “seamless” handling of poorly written website code. This code was very useful in the late 1990s and early 2000s when nascent programmers were still figuring out how to write relatively static web applications. Now that web applications are much more dynamic this code bloat is a performance drag affecting many of the more complex Web 2.0 style applications.

In a classical example of an innovator’s dilemma Microsoft invented the key technology behind Web 2.0 applications, but IE is still a laggard due to the legacy yolk. A key factor of Firefox’s success, and its dramatically better performance, is they took the time to clean up their legacy code base. IE 8 is making steps towards better support for W3C Standards and better performance, while supporting a migration path for enterprises. In many respects, following how Microsoft balances these objectives is more important than following Chrome’s progress. Although I imagine the press will instead follow Chrome’s progress.

Where is the Innovation?

What new, innovative features does this Google browser have? So far it appears they have just implemented functionality currently in the existing browsers. As for new functionality, like video, we already have platforms like Flash and Silverlight that are pretty good and improving.

Mozilla’s recently released Firefox 3.0 has a much better optimized JavaScript engine and IE 8 will as well. So far, Chrome’s JavaScript engine appears to only be 13% faster than Firefox 3.0. Users do not notice 13% improvements. When Chrome goes live it will probably also be competing with IE 8.0 and IE 8’s performance improvement.

Overtaking Microsoft

Internet Explorer [IE] is a relatively crappy browser that has easily over 50% market share. As some claim, this isn’t solely because most people can assume a user has IE. It is because many websites still work better in IE; and many, probably most, of these websites are inside firewalls. Applications built for only a few hundred users or less.

The key to overtaking Microsoft’s browser isn’t to build a cooler browser. Apple (AAPL), Mozilla, and Opera have done that. The key to overtaking IE is to making a compelling ROI argument to enterprises to abandon IE for a different primary browser.

Enterprise Strategy

Unless Apple makes a big push into the enterprise or Red Hat (RHT) consolidates the many Linux splinters, Microsoft’s desktop dominance will probably last another decade; even with corporations not upgrading to Vista. On a side note, it would be interesting if Apple purchased Sun (JAVA), spun-off its hardware business (while it still has some value), and made a big push into the enterprise. Thin clients offer an alternative, but Windows and its partner Citrix (CTXS) are currently positioned relatively well. However, that is for another article. So for now, browser makers are still playing in Microsoft’s playground.

For the majority of websites, it is not cost effective to build and test the website in multiple browsers. Project teams focus on one or two core browsers and make a best effort for the others. This is especially true for corporations building websites only intended for a limited number of users. As a result many corporations choose the browser with

  • The largest market share.
  • The one they have built applications on for years.
  • The one they know how best to manage. For support reasons companies need to manage how and when core software upgrades are presented to users.

Active Directory

At any large or mid-size company, any internal website can know who you are (and probably does) if you are using Internet Explorer because of its tight integration with Active Directory. This allows easy implementation for single sign-on across company or even inter-companies’ web applications. To gain critical enterprise adoption the existing browsers need better support for Active Directory and how to manage it.

Offensive or Defensive

Few people have mentioned that Chrome may actually be a defensive move by Google to protect their search engine turf. I regularly use iGoogle and Google Maps, but I haven’t actually gone to Google.com to perform a search in at least a year. I perform all my searching in the browser. Of course, I primarily use Google, but I find myself using other websites, like Wikipedia, Ask, and Dictionary.com more often; and my switching costs are basically nil. In fact, I’ve even started using Live Maps because of its far better international support (Live vs. Google).

Five years ago, I remember wondering why someone would use a search engine other than Google because it was at least twice as good as competitors. While completely subjective, I think Google is now only marginally better. I have a dozen search engines configured in my browsers and I’m always one click away from not using Google. Now I wonder why people are so reliant on Google. It is getting easier to use other search engines and Google is growing up and becoming a little closer to being evil.

Laissez-Faire Mess

Google is well renowned for encouraging engineers to spend 20% of their time pursuing individual projects. This has created a great environment where ideas bubble up. However, some initiatives require top down strategy. Creating a browser platform serving a multi-sided market is such an initiative.

Fortune called Google’s management style a “laissez-faire mess." The questionable strategy and rollout of the Google browser may validate that endorsement. In fact, one could go so far as to say that Google’s laissez-faire strategy resembles one of its competitor’s peanut butter strategy.

Google still has yet to prove that massive hiring into a laissez-faire environment can fuel innovation. In fact, Apple, perhaps the most innovative company this decade, takes the opposite approach by keeping its core design teams small and focused. I am still questioning the special capabilities of Google’s Android and now we have Chrome. For comparison, I can critique specific features of the iPhone, such as the battery (which Apple will eventually fix like they did with the iPod), but the special capabilities of the iPhone are crystal clear to any observer.

Current Market State

As an advantage of losing Browser World War I, Mozilla was able to free itself of its legacy code and become the performance leader; just as Web 2.0 applications began taking off. Microsoft finally seems motivated to accelerate many legacy applications migration path allowing it to offer better support for standards and increased performance. Although it is apparent that IE 8.0’s performance will still trail Firefox 3. Safari will be relegated to the smaller yet growing Apple user base with little enterprise support. Opera is a good browser that doesn’t offer a compelling enough reason to switch (sounds similar to Google’s Chrome).

Currently, Firefox has a real chance to become the number one browser in Europe, but its market share (and growing importance) may be hurt by the splintering browser market due to Safari and now Chrome.

So What Has Changed?

I’ll download Chrome and test it out, but I’m not excited to build a new website and have to test it in an additional browser. That is the problem that Google has to address. Not just for the hundreds of thousands of websites on the internet, but especially for the hundreds of thousands of web sites not on the internet (at least not without a username and password).

If Chrome was built by someone other than Google, we probably wouldn’t be hearing about it. I am excited that one day enterprises will be building websites on a browser much better than IE 7, but that will take a vendor who understands enterprises and has a relevant platform strategy. I haven’t heard such a strategy from Google. For the near future, it is most likely that vendor will be Microsoft and now less likely to be Mozilla. I imagine the IE and Firefox teams will wake up tomorrow looking over their shoulder at each other, not Chrome.

Chrome’s biggest impact may be a weakening of Google’s support of Firefox. Google has been the biggest sponsor for Firefox. If this support (technical or financial) diminishes due to Chrome, then the biggest beneficiary of Chrome may indeed by Microsoft. Let’s hope not. The browser market needs a strong number two to compel the market leader to innovate. However, the internet will not benefit from a splintered browser market requiring programmers to support numerous browsers. Like any platform market, the browser market will trend toward a monopoly or duopoly market. Let’s hope it’s a duopoly.

So What Is Next?

Maybe Google will announce tight integration for Chrome with Android or some amazing new Semantic Web style feature. However, I’ll bet the next major disruptive innovation in this area will come from Apple or one of the new companies created by ex-Googlers.

Disclaimer: I own no stock in Google, Microsoft, or Apple.

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This article has 16 comments:

  •  
    Sep 03 11:19 AM
    Have you actually worked with the Firefox 3? After all the hype, it still has many problems and feels slower and less user friendly than the previous version. I downloaded Chrome last night and played with it for about an hour. It was intuitive and noticeably faster. I expected not to like it because in many cases Google doesn't have sense of style that, say, apple does. Case in point, compare Google finance to Yahoo finance and the latter wins hands down. In this case, though, I liked Chrome quite a bit. I don't have a horse in this race, but from this user's perspective, I will be keeping Chrome, not Firefox 3.
    Reply
  •  
    Sep 03 11:19 AM
    Have you actually worked with the Firefox 3? After all the hype, it still has many problems and feels slower and less user friendly than the previous version. I downloaded Chrome last night and played with it for about an hour. It was intuitive and noticeably faster. I expected not to like it because in many cases Google doesn't have sense of style that, say, apple does. Case in point, compare Google finance to Yahoo finance and the latter wins hands down. In this case, though, I liked Chrome quite a bit. I don't have a horse in this race, but from this user's perspective, I will be keeping Chrome, not Firefox 3.
    Reply
  •  
    Sep 03 11:36 AM
    So, here's the scoop. Firefox has been a better browser than IE for quite some time. The plug-in choices to make browsing better are amazing. Yet, after several years, IE still retains like 60%+ market share. Why??? People feel comfortable with a name they know & quasi-trust. Google's Chrome won't eat into Firefox's market share -but, it will definitely eat into IE's share. The same people that trust Microsoft will also trust Google -and maybe moreso. Is this good? IMO, yes. The amount of code workarounds that developers have to do to support IE's poor rendering is unbelievable -and can often double the amount of time spent on a web project. Google's underlying rendering engine will likely function very similar to Firefox -so, the addition of Google's engine probably won't significantly increase development time. However, if Google can help bring down the IE marketshare down to, say, 10% -then they probably will save more of their own developers man-hours spent on compatibility than it costs them to launch the competing browser. Thus, Google accomplishes two things. One, they save developer costs. Two, they hit Microsoft hard and potentially keep Microsoft from being able to compete in the emerging mobile browser market. Developers over at Mozilla/Firefox aren't sweating over this, but you can bet that Ballmer & Co. are screaming expletives that would make Andrew Dice Clay blush.
    Reply
  •  
    Sep 03 12:00 PM
    Google's goal isn't to dominate the browser market or even the mobile phone market. Their interest lies in selling more advertisements and services on the web. By introducing Chrome and Android they're creating more competition for the others and the end result will be more browsing by the world which will lead to more cash for Google.

    Google is thinking on a completely different level in a new age. If the iphone conquers and everyone's grandmother has an iphone, Google will be very happy, as well as Google shareholders. Chrome and Android put pressure on those other manufacturers and help them to help Google.

    I find this to be a very refreshing approach compared to the kill-the-competition methods of certain other companies.
    Reply
  •  
    Sep 03 12:20 PM
    Reply to User 255037:
    I agree that Chrome will eat into IE market share and I'm sure that on some emotional level that will make Google people smirk.

    The Chrome rendering engine is based on Webkit which is more related to the Safari browser from Apple then it is to Firefox. The javascript engine was bought from a Danish company. The goal is to produce as fast a browsing experience as possible. Faster browsing means more web pages and searches displayed and happier users, which means $$ for Google. They also incorporate Google Gears into Chrome which may also be important to create a better web application experience.
    Reply
  •  
    Sep 03 01:03 PM
    Yahoo has always led in new inovations and has offerd me and millions of others great entertainment. If you dont believe it go to Yahoo games and see just how many people from around the world are there.
    When it comes to e-mail they were always the best offered for freee.
    So on and so forth. I dont want to learn another browser just because it is a trend.
    One faithful Yahoo customer for over a decade.
    Reply
  •  
    Sep 03 01:19 PM
    Thanks for the thoughtful article.

    I have tried a few other searches, and I still find Google's to be much better than the alternatives. We'll see if that ever changes. The only major problem with Google searches are the "spam page" results. I always wonder why it is so hard for them to just block these sites by writing an routine that excludes sites that have thousands of internal links to thousands of other pages on the same site.
    Reply
  •  
    Sep 03 01:54 PM
    Google has moved into other markets not to expand Search, but to defend it.

    Goog is using the same trick MSFT did, attack attack attack. Move from your base into everyone elses force them to fight at home and thus keep the battle away from your cash cows.

    Why do you think MSFT is bringing the battle to search. It is a battle of cash , will and tactics. Goog attacked MSFT a couple of years ago by moving into apps, MSFT is responding by going after search. This is just another battle in the on going war.

    GOOG is just as good or evil as MSFT in the end the public will wake up one morning and wonder "how the @@@@ did we let another MSFT grow right under our noses and cheer it on all the way.




    (long goog , msft )
    Reply
  •  
    Sep 03 02:21 PM
    Sorry, the author of this should actually try the browser. It is significantly faster than Firefox 3.0, not marginally 13% faster. Despite Firefox 3.0's fix on many memory leak issues of FF 2.0, it still becomes a monster memory hog at times. Your claim for lack of innovation shows your lack of knowledge about Chrome. Part of the reason of Chrome's resilience is that it manages every open web page as a separate process instead of a forking a thread from a singular process. The disadvantage is that there is higher startup memory, since creating a new process incurs more memory overhead. But the benefits is there won't be an extra layer of memory fragmentation and when a website crashes, it won't crash the whole browser along with other working websites. That is innovation there.

    The point of W3C compliance is so people don't have to write websites for certain browsers and the future of all browsers will be following this standard. Getting your website to work on Firefox will probably do the same with Chrome. If it doesn't, then Google devs have some work to do. The reason Firefox is awesome is its sophisticated plugin extensibility. When Chrome has that community, it will definitely be something I'd use (especially when there is a adblock plugin that will block ads, including Google Ads [haha]).
    Reply
  •  
    Sep 03 03:24 PM
    I agree with Excel,its much faster and a lot simpler than fox or ie.I'm hooked!
    Reply
  •  
    Sep 03 08:00 PM
    Yes, Chrome's modern, multithreaded, open architecture has the potential to replace the windows os all together. Remember, Windows started out as just a dos shell and evolved based on marketing priorities, not design excellence. Wouldn’t it be great if users weren’t forced in to fake upgrades just so M.S. can collect a few more billion dollars every few years?
    Reply
  •  
    Sep 03 08:41 PM
    I have been using both IE and firefox for the last two years. I switched to vista about 6 months ago, I had so much problem with IE so I have been using firefox about 75% of the time.

    I tried chrome today and I was impressed. It seems that it load sites a bit faster than firefox and IE. I also enjoyed some of their nifty stuff they added. For example, the ability to go to a site without leaving any trace that you have been on the site on the computer. This is specially nice future If you are on public computer and want to check your bank statements and etc. I also love the fact that most of my freqent sites are available for click when you open chrome.

    Being a website developer, I use browser 6-8 hrs a day and I do have to say the speed, the slick look without lots of junk has convinced me to make it my primary browser.
    Reply
  •  
    Sep 03 09:05 PM
    Chrome was worth the $69.95 installation fee. I was extremely happy when I was cold called in the dead of night. By the way, I am a licensed Chrome vendor and if you want to download it from my site at 10 percent off, feel free! Tell your friends to join the Shining Path Chrome Download Team. Oh wait, we're talking about Chrome? I thought this was a post about Avacor. Sorry.
    Reply
  •  
    Sep 03 11:27 PM
    I like iCab the best of all....
    www.icab.de/
    Reply
  •  
    Sep 04 01:11 AM
    Sorry, but being a little faster than IE is just not good enough. Chrome needs something big to distinguish it from IE and Firefox. Google needs to figure out how to sell its innovative technological advancements. I'm tired of the lack of focus in this company and the pet-projects that never go anywhere in adding shareholder value. We invest to make money; not to donate code that investors paid a premium for.
    Reply
  •  
    Sep 04 11:07 AM
    Reply to BertNo!!:
    Chrome is not a pet project. Yes it is open source and free and Google will make no money on it directly.

    Let's assume Chrome causes an increase in web usage by 0.001%, either because chrome users are getting a faster and better web experience or because IE and Firefox were nudged to do better. How much money, in units of developer salaries, will Google make in increased ad sales?

    Google may seem like just an informal fun company but they are serious business.
    Reply
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