Making money from selling the browser

Companies can sell their web browsers if the products are unique enough, such as SigmaOS and Sidekick with a focus on improving user productivity. By offering an experience that sets it apart from others, there’s potential to attract a niche user base willing to pay for these features. But as the market is very competitive, a paid browser is rare.

Commoditizing the complement

Commoditizing the complement is a strategy usually adopted by tech giants. In the context of web browsers, the goal is to leverage the browser to strengthen another business. If you’re not familiar with this concept, let’s first take a look at the definition of “complementary good”:

A complementary good is a good whose appeal increases with the popularity of its complement […] [For example,] if the price of petrol were to decrease by some amount, this would result in a higher quantity of cars demanded. — Wikipedia

In short, the demand for a product rises when there is an increased demand for its complementary product. To boost the demand of a complementary product, companies usually transform it into a commodity (thereby significantly reduces its price).

There are several ways to commoditize a market, one of them is introducing a high-quality open-source project. By enabling other developers to build upon the codebase, users would have access to many good options. As the competition intensifies, companies struggle to justify a price tag higher than $0. Additionally, achieving dominance in such a market becomes notably more difficult, serving as a deterrent to potential threats against the owner of the open-source project.

Netscape adopted this strategy at the start of the second browser war. Initially, they charged for the use of their browser, Navigator. But as competition with Microsoft Internet Explorer intensified, they waived the fee and open-sourced it. Given Netscape’s primary focus on selling web server products, the widespread use of the web would increased demand for their server offerings. At the same time, Netscape saw the dominance of Internet Explorer as a threat. Because Microsoft had its own line of web server products, there was a concern that Microsoft might exploit the popularity of Internet Explorer to prioritize their products, potentially disadvantaging competitors like Netscape.

Netscape Navigator failed, as it’s hard to fight the power of default. Convincing users to make the switch requires a browser to be 10 times better than the default option, and/or possess a distribution advantage. Google Chrome has both of these. It offers a vastly superior experience compared to Internet Explorer, and benefits from being the default browser on Android phones and Chromebooks. At the same time, Google pursued a strategy of commoditizing the complement through Chromium. Nowadays, the most popular browsers are Chromium-based, such as Brave, Vivaldi, Opera, and even Microsoft Edge. The rationale is the same: an expanding user base on the web, plus an increased web usage per user, translates to a higher demand for their online advertising business.

The browser is a user acquisition channel for another business

Several examples highlighting this strategy:

While this strategy may look similar to commoditizing the complement (both involves leveraging a high-quality, free browser), there are distinctions. The objective of commoditizing the complement is to intensify competition in the adjacent market, minimizing the cost of using the complementary product and therefore boosting demand in the subsequent layer. Additionally, the strategy aims to prevent any single competitor from becoming a dominant player. On the other hand, “browser as a user acquisition channel” works only when the browser can amass a large user base. The ideal result is the browser becomes one of the most popular browsers on the internet.

Improving the value of the ecosystem

If Safari weren’t pre-installed on Apple devices, users would have to go through the inconvenient process of searching for and assessing the quality of other browsers. Those products might lack the polished design, security, and privacy offered by Safari. Considering how important a browser is for users, not having Safari pre-installed could damage the reputation of Apple devices as “it just works”.

In the case of Edge, not only the browser helps direct users to Microsoft’s family of applications, it also contributes to the overall value of those products. For individuals already using Microsoft Office, Edge can help them use those products more conveniently and productively (as they are integrated with Edge). For businesses, Edge offers a robust set of enterprise controls, security features, and additional productivity tools. These factors make the Office suite more attractive to potential buyers.

Google, Apple, and Microsoft each have their own identity platform (basically it’s the account you use to login to those companies’ products and services). Chrome only accepts a Google Account for logging in to the browser, Edge relies on a Microsoft Account, and Safari requires an Apple ID. Possessing user data and preventing competitors from accessing it comes with significant advantages, such as improving the advertising business, leveraging data to enhance their products, and strengthen the lock-in effect.

Setting web standards that give the business important advantages

Google has been utilizing Chrome’s market dominance to shape web standards in favor of its products and services, especially the advertising business. An example of this is Chrome discontinuing support for the H.264 video codec. As a result, YouTube wouldn’t have to keep paying licensing fees to the MPEG Licensing Association, which holds patents on H.264. Another example is the introduction of Manifest V3, which will make it harder for ad-blockers to work effectively.

Besides influencing web standards, Google has been leveraging Chrome to counter Apple’s efforts in enhancing user privacy on the web.

In contrast, Apple’s decision to drop support for Adobe Flash on Safari was rooted in the technology’s limitations, notably its inability to facilitate the development of touch-based websites. Flash also had a poor track record in terms of reliability, security, and performance; it also drained device batteries rapidly, potentially compromising the user experience on MacBooks and iPhones. As a result, websites relying on Flash have become increasingly rare.

To serve an altruistic purpose

In contrast to the above examples, several open-source browsers are created with the sole objective of promoting a free and open internet. This is an admirable endeavor. However, aside from Firefox, there are few other widely recognized products in this category. The financial constraints associated with these browsers make it challenging for them to compete against well-resourced companies such as Google or Microsoft.