Google and Mozilla Firefox inked a three-year renewal of their partnership this week. Under the new arrangement, Google will remain the default search engine on the open source browser.

Good Deal for Firefox

Royalties from search engine deals account for as much as 84 percent of Firefox’s annual revenue, which came in at around $121 million in 2010. Though the company has a loyal following, they only control about 22 percent of the browser market and 0 percent of the search engine market. Without the Google deal, Firefox would have been in serious trouble.

There had been some speculation that Google wouldn’t renew their Firefox deal in hopes of growing the audience for their own browser, Chrome. But the outcome of talks between the two companies was never really in doubt. Firefox is small, but they’re in important player in the browser battle.

Whether Google will want to renew the relationship in another three years is still very debatable. If Chrome has enough market share, Firefox could find themselves in a difficult negotiating position. And if the Firefox market share has decreased that much, they might not be able to strike better deals with other search engine companies either.

Good Deal for Google

Google is locked in a fierce battle with other search engines, like Microsoft’s Bing, as well as social media like Facebook for control of Internet traffic and every click matters. And every Mozilla user that makes a Google search is one less person searching on Microsoft’s Bing search engine.

For a company with as many resources, and as much revenue, as Google there’s plenty of time to grow a Chrome user base. As of September, Chrome users accounted for about 16 percent of the browser market. That’s a pretty large share for a browser that’s only been around since 2008.

Browser War Showdown

There seems little question that Chrome will eventually grab a large chunk of Firefox’s, and Windows IE, user base. Google products are designed to work together seamlessly and the company has the means to promote their browser through AdSense and other mediums.

Google Docs users have probably notice the message appearing above their work the past few weeks that reads, “Your browser does not support all the features of Google Docs. If you are having problems, try Google Chrome.”  That’s exactly the sort of steady, but subtle, message that will eventually convert Firefox users into Chrome users.

The Future

Of course, grabbing a large share of the browser market is only part of Google’s long term plan for tech supremacy. There’s also development of Google branded phone headsets, a Google Operating System, and a Google branded poker site.

Google is well positioned to control almost every aspect of our digital lives and this latest deal with Firefox will only help them in the long run.

What do you think of Google’s latest moves? Does one company with this much power help the Internet or harm it? Let us know in our Online Gambling Newswire Forum.

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