Google's Chrome browser has looked like just another side project for the company. Sure; Chrome is a speedy browser, and has garnered impressive market share in a short time. And, yes, Google gets to push browser development a bit.
But the real importance of Chrome — and why Google is marketing the browser so heavily around the world — boils down to the lifetime value of a Chrome user.
Chief financial officer Patrick Pichette was asked about the importance of Chrome on the company's earnings conference call.
There are really two stories on Chrome. There is a tactical question and there is a strategic question. Chrome is really pushing the web, and it has a fantastic opportunity that, when people have adopted Chrome, they basically instead of looking for Google and looking for search, the omnibox gives them immediate access to Google search. So from a strategic perspective, it has that in Chrome OS. On a tactical basis, everybody that uses Chrome is a guaranteed locked-in user for us in terms of having access to Google.
Nikesh Arora, chief business officer at Google, also chimed in on the marketing return on investment for pushing.
We have over 120 million daily users and 40 per cent of them were added in the past year as a result of our marketing efforts. So you've seen the 30 per cent growth quarter-over-quarter in our Chrome usage. So I think, from all perspectives, the Chrome strategy is working. The way we distribute Chrome is people get it organically or they get it based on our marketing efforts, or they see our marketing and they choose to download it, or we work with partners who help us promote Chrome to our users and to other users. So in that context, we found that marketing very often ends up with an equivalent or better ROI than us having to go to partnership deals. Sometimes you'll see that our TAC and our marketing around Chrome is fungible. Where we spend money and marketing, we take away from TAC as it relates to Chrome. So you can expect us to continue to drive Chrome strategically because it has not just a Chrome specific benefit for us but it also impacts many of our other products that work as part of Chrome. So the lifetime value of a Chrome user is phenomenal.
Boil those comments down, and the Chrome returns look something like this:
- a Chrome user can contribute to a feedback loop that improves search quality;
- a Chrome user will use Google extensively with little to no slippage;
- Google can spend less on traffic acquisition costs;
- the company doesn't have to spend as much on distribution — think the fees for the Firefox search bar; and
- this locked-in Google user is more likely to increase engagement as the company adds Chrome apps and social features down the line.
By the way, Chrome also gives Google a hand in browser standards, but that return on investment seems decidedly naive when you consider the lifetime value of Chrome user.
Via ZDNet US