Browser Wars - Money and Choice.
Internet browsers are becoming vitally important to us all as we increase the time we spend using
the Internet. The browser and its functionality is the lens through which we actually see what’s on
the Web and its quality of display and speed may easily be taken for granted. The popularity of a
browser, and who controls that browser’s development, will determine how we experience the
Internet in the future. Ninety-three per cent of global Internet use is made via Internet browsers
which are funded directly or indirectly by just two iconic companies: Microsoft and Google. These
companies are slugging it out in an intense bid for market dominance for a product they both give
away for free. Many people don’t realise that revenue from Google provides 71% of the total
income for the Mozilla Foundation, the developers of Firefox, the other major developer of Internet
browsers. It’s fascinating to note that Mozilla doesn’t actually name Google in its company
accounts but coyly refers to the company as “a search provider.” What’s really intriguing is that
Mozilla’s three year contract with Google expires in November this year (2011) and the odds are
even on whether the contract is renewed and, if so, under what terms. But as Firefox has a 7%
greater market share in Europe than in the rest of the world, where its share is 28%, Google will
have to take this into the reckoning if it really wants to build a strong presence here in Europe. If
you’re a worried Firefox user, or you just don’t believe this information, check it out on page 16,
Note 9, Concentration of Risks in the latest Mozilla Financial Accounts here.
The chart above uses data from Statcounter to show the share of the Internet browser market in
Europe. Statcounter tracking code is installed on over three million websites located around the
world. These websites receive in excess of 195 billion “hits” or server requests from Internet
browsers in the course of a year and provide one of the best public sources of reliable information
about Internet browser market share. Europe is generally a good early indicator of changes in
Internet browser use – way ahead of the United States. One reason for this is that in March 2010
Microsoft was forced to comply with a European Union (EU) ruling to offer EU residents a choice of
Internet browsers, rather than the default setting of installing Microsoft’s Internet Explorer
browser. This action was finally imposed on Microsoft in December 2009 at the end of a bitter,
long-running anti-trust dispute. You can read about this here or view the browser choice screen
that Europeans see here.
What the data over the last three years clearly shows is the dramatic and consistent rise in the use
of Google’s Chrome browser. This has been primarily achieved at the expense of all versions of
Microsoft’s Internet Explorer which have shown a steady decline except for a recent pick-up when
Internet Explorer 9 was launched. My take on this is that it indicates that Internet users value
browsing speed above everything else. And Google plays on this, as you can see on their section of
the EU Browser Choice screen shown on the chart. Google’s browser, especially version 10, has
been highly rated for speed; you can see the speed difference on a chart here. Microsoft’s Internet
Explorer version 8 has cost it a lot of market share because of its poor performance and speed. As
the chart demonstrates, the recent pick-up in Internet Explorer use is due to Explorer 9’s much
improved speed increase. In fact tests show that Internet Explorer 9 probably has the fastest
performance of any browser now, watch this video and be impressed. Of course, not all of the
increased popularity of Chrome is down to its speed in displaying web pages, some if it’s down to
slick marketing. It’s ironic that Google makes 96% of its income from advertising (see page 13 of
the pdf of the 2010 full year Accounts) but it actually grew to be a behemoth in just over seven
years without ever spending anything on advertising. It’s only during the 30 months, (since its
launch of the Chrome browser in December 2008), that Google has started to advertise in Europe.
Clearly this has partly been to take advantage of the EU Browser Choice screen. Google’s
advertising media spend has primarily majored on outdoor posters with the occasional promotion
in newspapers, for an example see this article. This marketing expense is unlikely to decrease as
Google continues to face up to Microsoft.
Did you know that Google is developing a unified operating system across mobile phones, laptops
and desk top computers that will integrate into their “cloud services”? The first step to this is oddly
code-named “ice cream sandwich,” and it’s due out at the end of this year, you can find out more
by reading this article. Meanwhile, Microsoft’s next step towards a unified operating system is
known as Mango. You can see what they’re up to by watching this video here.
With all this in mind, you can appreciate how strategically imperative it is for Google and Microsoft
to achieve a dominant browser market share and why the two companies will be anxiously
focussing on their browser market share like in the chart shown above.
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