The KSeeker

In Search of Knowledge…

FireFox vs Microsoft vs Google

Posted by Girish Krishnan on April 25, 2007

During my B-school days one of the most talked about cases in our strategy classes was the Microsoft – Netscape saga wherein MS bundled the IE browser with Windows OS and killed Netscape. Having heard the story and its corollary so many times, i get reminded of the many famous epics where battles were won due to excellent strategies (Greeks entering Troy in a wooden horse) and some of those emotional moments when the responsibility to carry on the fight were passed to the progeny (Oru Vadakkan Veeragadha (The Malayalam Movie Classic) – where the son of the slain Aromal Chekavar – a famous sword fighter – goes back to avenge his father’s death!). The corollary (in case you are not aware of) is that the Mozilla Foundation which started the open source community based development of FireFox, was funded by none other than old Netscape employees! Its a new age epic for sure and though i am not sure how the end is going to be, these are times when we would see some really complex strategies!

The control over the browser market has a lot to do with the fight to own the desktop.Currently IE has around 78 % market share and FireFox has 15%. The major threat to MS comes from google, because it is sitting on a pile of cash ($12 billion) and market understands its potential (the company valuation is $141 billion!).
Yesterday we heard the news that in a latest brand value survey, Google upstaged MS as the world’s most powerful brand. If i were Microsoft i would be thinking of how i could choke Google’s tremendous cash flow, which comes from its superb search based ads-platform product. Google is aware of the risk associated with having just one supernova product and is frantically trying to diversify, but until now has not been successful in having a good product 2 which also contributes substantially to its revenue. There are broadly three kinds of threats that i envisage to Google
1) Once is through a Disruptive technology which takes the ad serving business to a different level
2) A demand choke -eg: Remember that ads are served through the browser – What if browsers refuse to show ads?
3) A supply boost by the competitors -eg: Other players in the industry tied up and fight Google’s business model with a better ad serving and monetising product

The Internet is the means to deliver tremendous value to people all over the world, and the medium through which this happens is the Browser. As Mozilla FireFox catches up, it continues to eat up IE market share.In the last year, IE Market share has gone down by 5% and FireFox has come up by the same amount.
It is a great challenge to Microsoft and this time around, it comes from an open source community, not from a profit interested company. If you keep point 2 above in mind, it is a bigger threat to Google as well – in fact to all those companies which make money through ads! – MS’s business is at present much more diversified to get affected by the browser war, but it would be a big blow to its controlling power. If you are decently tech savy, and can do a pedestrian search across the internet for plugins, you will find out what i am talking about!

The only way out for companies that make money by showing ads is to innovate something which can replace the conventional browser – something which changes the game altogether – it should be easy to use and people should be willing to use it instead of a browser. Or else it should be a value add on the existing browser for which people are willing to pay for or tolerate ads. Its time to find a new business model. Quoting Achilles from Illiad, someone can get ready to say.. “You gave me peace in a lifetime of war”…lets see who it would be, i mean – first!.


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