Foremski's Take: GOOG Browser Designed to Please Wall Street

By Tom Foremski - September 2, 2008

Google Inc. (NASDAQ: GOOG) today launched Google Chrome, a new open source browser intended to create a better web experience for users around the world. Available in beta in more than 40 languages, Google Chrome is a new approach to the browser that’s based on the simplicity and power that users have come to expect from Google products.

Google Press Center: Press Release

Foremski's Take:

Google's new browser will reclaim millions of dollars that it pays to third parties such as Mozilla, the open source organization that develops and maintains the popular Firefox browser, for traffic directed to its sites.

Mozilla received revenues of $66.8m in 2006 and $52.9m in 2005, about 85 percent came from Google payments for each search query conducted by a Firefox user through Google.

Apple also receives substantial payments from directing Safari users to Google. These payments are all part of Google's Traffic Acquisition Costs (TAC), a closely watched number by Wall Street analysts. A small reduction in TAC is always welcomed by a large boost in Google's share price.

Google's payments to third parties such as Mozilla and Apple, have jumped by more than 77 percent over the past year.

In GOOG's most recent second quarter financial report, TAC, not related to its AdSense ad network, was $154m. One year ago it was just $87m.

With its own browser, Google can capture more traffic directly and reduce those payments significantly, which drops straight to its bottom line, boosting its overall profitability. It's an excellent ROI that is bound to please its investors.



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By Tom Foremski - September 2, 2008 | Permalink | Comment | Category: Google [GOOG]
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Comments (3)

Alan:

That's the most sensible blog post I have read so far on the subject.


The merging of the address bar and search bar gives Google too much control over navigation. It separates companies and website operators from their website addresses and brands.

Companies spend heavily to establish and maintain brands. Google has just imposed itself between consumers and businesses. Direct navigation has now become proprietary search, whereby Google uses its discretion to filter out web addresses and domains that it deems less relevant.

I object and I hope you do too.


Tom Foremski:

Yes, merging the address bar and navigation are a point of concern. It is not just link farms based on mispellings that should be worried but all brand owners...


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