Wise Startup Blog

So you’re probably asking yourself (at least I was), why on Earth would Google build a free browser to compete with Firefox, when Firefox is already a great set of software.

Google, after all, is an advertising company at heart, not a software development firm (MSFT). The answer makes total sense, however, when you look at it from a larger perspective.

Vertical Integration of Search

In the oil industry, Shell was famous for owning the oil fields, the refineries, and also the gas stations. Vertical integration allows you to cut costs by keeping everything in-house. The same strategy applies to search. Right now, the only way for customers to use Google is through a web-browser, whether it be AOL’s browser, IE, Firefox, Safari, etc.

If Google owns their own browser, it makes it a lot easier to integrate in all of Google’s services and guarantee users search via Google, and in turn, Google sells more advertising.

Browsers Are Cash Cows

Mozilla posted $66 million in revenue last year, with 85% of that coming from integration with Google. Firefox makes their default homepage redirect to Google (http://www.google.com/firefox).

With tens of millions downloads of Firefox, that’s a lot of customers Firefox is sending to Google.

Additionally, Google is integrated into the Firefox search bar. That’s the only search mechanism I use, and I can’t remember the last time I was on Google.com to start my search.

If Google can reduce the amount of money it has to pay Firefox to promote Google Search, simply by building their own browser, then Google can save themselves handfuls of money every year.

Google Office Needs Some Help

If you’ve ever used Google Docs, Excel, etc. you know it could use some work. The slight lag experienced when entering in a lot of information is a major annoyance compared to using any Microsoft offline application.

Granted, being connected to the cloud and being able to collaborate on documents is great, and that’s what we’ll see with Chrome.

If Google really wants to put a hurting to Microsoft, they’re going to need to increase the user experience with their office suite, and integrating Google Gears, and a number of other as yet unannounced plans, I think we’ll see a huge push for Google’s Office suite.

Will You Be Using Chrome?

I for one rely heavily on Firefox and the extensions from the platform. Much the same way the Apple app-store now has an early mover advantage in the Android vs. iPhone battle, we’re seeing, I think Google may face similar problems as well.

Google should spend some time converting over a number of current Firefox extensions onto Chrome to help ease the transitional period, because there’s nothing worse than using two different browsers on the same computer!

Share your thoughts about Chrome in the comments below.