Google's launch of its browser Chrome seems to be less to do with running web applications quickly, than it is about its rapidly growing traffic acquisition costs.
Google pays a lot of money to third parties for traffic directed to its search sites. Mozilla is the largest beneficairy, it receives a payment for every Google search made by a Firefox user. Mozilla received revenues of $66.8m in 2006 and $52.9m in 2005, about 85 percent came from Google. Apple also receives payment for traffic directed to Google from Safari users.
With its own browser, Google can capture more traffic and reduce its payments to third parties such as Mozilla, and Apple, by tens of millions of dollars. This can have a dramatic effect on boosting its profitability and its share price.
Mozilla has repeatedly said that it can easily survive without Google. It will be interesting to see how this move will affect Apple. Industry insiders have told me that Google's payments to Apple have helped fund a large chunk of Mac OS X development.
Will Apple launch its own search service? I think it might.