Posted 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'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.
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.Tweet this story Follow @tomforemski