Not browser, OS.  More about that in a moment.
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But, first, our kind, venture capitalists, loves disruption. When the established companies take too much room on the Petri dish, there is no way for a new bacterium to prosper.  When a Microsoft dominates a market, to pick a random example, launching a competitor becomes prohibitively expensive.  We love to see the economy move to virgin territories or to watch technology (or the law) weaken dominant players.
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So, what’s not to like about Google’s new browser possibly weakening Microsoft’s position?  Possibly again, we could be trading one Microsoft for a new one, Google, for another black hole of a company sucking in all the business models coming into its orbit.

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With this out of the way, let’s take a closer look at Chrome.
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f you have the time and inclination, you might want to read Steven Levy’s story in Wired, or CNET’s shorter but insightful article, Why Google Chrome?  Fast browsing = $$$$.  I also like Niall Kennedy’s blog post: The story behind Google Chrome and, lastly, a refutation of the unavoidable conspiracy theories: When does Google Chrome talks to google.com? As I write this, a Google Chrome search returns close to 13 million results…
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Back to the OS question. As early as 1994, Marc Andreesen, of Netscape fame, said The browser is the OS.  Many, yours truly included, thought the statement was both technically flawed and self-serving: Marc was one of the authors of the Navigator browser.  In 2008, Sergey Brin repeats the mantra.  Like Marc, he’s technically wrong but existentially correct in the most important of ways, the ways of business wars.  Like Marc, Sergey knows the role, the power, the weight of the (now) underlying OS.  The operating system juggles tasks, manages hardware and software resources such as memory and input/output devices.  With processors executing one instruction at any given instant, the operating system manages the illusion of many concurrent activities, downloading videos, getting email, Instant Messaging, playing music and getting pictures out of a digital camera.  For the applications programmer, the OS is the genie right under the water’s surface.  Wherever the coder sets foot, the genie is right under there, making sure the techie walks on water.
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And, ask Microsoft, not if the OS matters, but what happens when OS trouble happens, when Vista misfires.
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But Mark and Sergey are right, we have entered a new era, Cloud Computing and yet, the lessons of the desktop age are not forgotten. Going back to the application programmer’s feet staying dry, Microsoft played and won the game of tying the OS and the applications.  Windows programmers make sure Microsoft Office programmers have what they need.  Sometimes, this happens at the expense of competitors who can’t always have access to the same technical information, either at all, or in a timely fashion.  At the very start of the Internet era, Microsoft sees what they need to do, again, tie the browser and the OS.  This gives Microsoft control of Internet applications because these need to comply with the dominant browser from the dominant OS and office applications supplier.  Internet Explorer, free and tied, kills Netscape Navigator.  Microsoft spends time and money in various courts around the world but appears to have won that battle.
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But, in September 1998, Google starts and quickly rises to its dominant position in search and advertising. In parallel, a non-profit foundation, Mozilla, resurrects Navigator as the Open Source Firefox browser.  Most of us like Firefox: free, good and getting better with every version, available on Windows, Linux and Macs.  Not tied to Microsoft or Apple.  In our happiness, we paid little attention to Mozilla’s ties to Google, financial ties, millions of dollars, $66.8 millions in 2006, to be exact.  A 26 percent increase over 2006, with little reason to think the progression stopped in 2007.  That revenue is mostly referral money generated each time we use the Google search box in Firefox.  In other words, Google cleverly financed a Microsoft (Explorer) and Apple (Safari) competitor.  A successful one: recent browser statistics credit Firefox with 43.7% share versus Explorer versions totaling 50.6%.  Too successful, perhaps.  Assuming more than $80 millions paid to Mozilla for “traffic acquisition costs”, a fraction of that easily pays for the engineers and parasites needed to write decent browser code.  That would be a make vs. buy argument.  And that would be the wrong one.
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Google’s decision to ‘roll its own’ is based on the strategic requirement to provide its Cloud Computing applications with their own, controlled, under the water genie. Cynics will say Google is playing the Microsoft game of exacting monopoly profits by tying the new OS, the browser, with the new era applications.  But, there are several twists to that analogy.
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First, Chrome is an Open Source browser. Anyone can inspect and use the code for their own work.  In the first place, Chrome is based on the Open Source Webkit also used by Apple’s Safari.  One significant improvement brought by Chrome is the V8 Javascript rendering engine.  Anyone can take the code and use it in their own work – as long as the Open Source licensing is enforced.  Will this cause Apple or Microsoft to Open Source their browsers?
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Second, focusing on Javascript, Google makes another strategic decision, a good one in my view. Over time, browsers have become more complex as they need to deliver richer, livelier applications ranging from spreadsheets to games, from video to music or PDF documents.  Adobe now promotes a platform called AIR, working ‘above’ all desktop OS and purporting to be the engine of choice to deliver ‘Rich Internet Applications’, their words for Cloud Computing.
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Not to be left behind, Microsoft comes up with their own ‘cross-platform platform’, Silverlight for the same new era target. There’s even a third-party Silverlight version for Linux being developed, with some difficulties, by a Linux advocate no less.  Why would Novell’s VP of Engineering, Miguel de Icaza help Microsoft?  I forgot, Microsoft just bought another $100 million of Linux ‘support vouchers’ from Novell.
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Now, if you are Google, will you let Adobe or Microsoft design and constantly modify the genie under the water for your Cloud Computing applications?  Not if you want to control your destiny, not if that destiny is to ‘lead’, to stay Number One.
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Javascript’s it is and we have our own V8 engine for it.
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Today’s beta version looks good to some, and is panned by others. As the new fashion of perpetual betas dictates, see Gmail, we can expect a steady stream of improvements.  More interesting will be watching if and how Google plays the tying game, how it uses Chrome to give its email or photo editing programs features not available on other browsers or speed they can’t match.  And if, how Google one day manages to make money with these applications, the old fashion way, by charging real money for their use.  We VC would like to see that.  For us, ‘free’ is a four-letter word. -- JLG

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