Business Models and Google Chrome

Recently, I've been thinking about various business models that companies employ. Creative business models (or maybe they would be better referred to as creative revenue strategies) can be obvious in hindsight yet profound in impact. For example, a few years ago I had thought that Firefox survived through donations. Instead, I learned that they harness a much more powerful technique by partnering with Google. Of course, once you understand the strategy, you can see it employed elsewhere if you look hard enough. And it makes sense - give the user something they want (seemingly for free) and figure out how to profit from it elsewhere. It's a win-win situation.

After learning how Firefox makes money, Google Chrome starts to make a little more sense. Eric Schmidt noted that he didn't want to build Chrome initially, but you have to suspect that spending $72m on a deal with Firefox may have had as much influence on his decision to proceed with Chrome as the quality of the prototype did. Any user they could steal from Firefox would be that much less they have to pay in future royalties. Further, if Google could capture market share through Chrome in addition to those already using Firefox, it simply meant that many additional users that will have Google as their default search engine.

What may be most interesting though (at least in terms of this post) is the "non-obvious" reason for creating Chrome. Google's extreme attention to detail, coupled with a novel idea - combining the search and address bar - may have given them additional incentive to build Chrome. First, for an end user the combined search/address bar ends up being quite convenient; you no longer think about searching versus visiting a website, you simply type and go. But the clever part is that this allows Chrome to default to search above all else. For example, you might search for affiliate marketing (or anything for that matter) and stumble upon the Wikipedia page. But when you hit Ctrl-L and start typing 'affiliate marketing' again, the Wikipedia page is the second choice rather than the first:

Chrome Default Behavior

The default is to return to Google - and more people visiting Google means more people clicking ads. So not only does Chrome have the ability to lower costs, it may have the ability to increase revenue as well.

Note: I've noticed that Firefox now also defaults to search if you type something in the address bar that doesn't represent a web page, but I believe that came after the introduction of Chrome. Also, if you hit tab in Firefox it still defaults to a page you have previously visited.

Written by ktr in misc on Mon 23 January 2012. Tags: Business Models, General,

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