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  • AVG Technologies' (AVG) Platform business (i.e. the internet search product), including its browser toolbar, has been its most successful program to monetize its user base and has been AVG's primary growth engine, having grown from 8% of sales in 2008 to 45% of sales in 2012. We believe this revenue stream is in jeopardy.
  • Google (GOOG), AVG's primary search partner and currently the source of substantially all of AVG's Platform-derived revenue, is on the verge of announcing an update to its toolbar policy, something that has not been widely followed or discussed by market participants. Furthermore, few, if any, analysts on the street appear to be aware of the upcoming changes; if they are, they have decided not to publish or update their models accordingly. We believe that current consensus revenue and profit projections for AVG are severely inflated.
  • Imminent changes to Google's policies could dramatically lower the rate at which users install the AVG toolbar and consent to its default search option, at least slowing, but more likely severely reversing growth in AVG's Platform business.
  • The market appears to have misunderstood the significance of AVG's recent partnership with Yahoo (YHOO), with the stock rallying close to 50% on the news. We believe this partnership was formed in desperation and anticipation of imminent Google toolbar policy updates. While AVG has added Yahoo as a backup monetization partner, Yahoo's ability to generate revenue for its partners is far below Google's, and if the day comes that it has to flex its reliance on Yahoo search, AVG's revenue will likely contract in a major way.

We believe the equity is highly overvalued at current levels, with an intrinsic value of $8.50-$10/share, 30-40% below current trading levels.

Introduction

In the past decade, Internet search engines became one of the main revenue sources for software developers. The tremendous jump in search-engine advertising created a revenue stream for many software companies using the profit-sharing model. This model of directing users to search engines allowed many software developers to transition to a freeware model and helped them to grow. AVG is one of these developers.

AVG produces a suite of software security products, some of which generate Subscription Revenue and others that are distributed for free (i.e. freeware). AVG's hope is that its users download the internet search-based products (AVG Secure Search) that it bundles with its security products, so as to monetize its user base. In the event that an AVG user uses AVG's secure search functionality and clicks on a Google or Yahoo ad or sponsored link, the user generates money for that search engine, which is shared with AVG. AVG's Platform-derived Revenue is revenue AVG earns from its contracts with search engine providers.

Historically, AVG worked exclusively with one search engine provider at a time - either Google or Yahoo. It had an exclusive revenue share agreement with Yahoo from February 2008 to November 2010, and in November 2010 switched to begin working exclusively with Google. That contract expired in November 2012; in negotiating for a contract renewal with Google in Q42012, AVG sought non-exclusivity, was granted it, executed the new contract, and went on to engage in a second revenue-sharing agreement with Yahoo.

Subscription Revenue accounted for ~55% of 2012 sales. AVG's Platform business (i.e. the internet search product), including its browser toolbar, has been its most successful program to monetize its user base and has been AVG's growth engine, having grown from 8% of sales in 2008 to 45% of sales in 2012. (click to enlarge)

The immense success of the Platform business can be attributed to a very high rate of toolbar attachment to platform users; and, that, in hand, can be attributed to what seems to be questionable business practices. As we will demonstrate in the sections that follow, AVG appears relentlessly focused on growth, but at the expense of the user's experience.

AVG Toolbar and Default Search

Below is a screen shot taken from one step in the process of installing an AVG antivirus program. It is a user's consent screen, which if clicked through hastily, enables AVG to install its toolbar and Secure Search program on the user's PC.

Figure 2: Install Process

(click to enlarge)Figure 2: Installation Process; all Opt-out

Note that all the features are "opt-out"; in other words, the boxes are already checked such that the default is to install AVG Search. In many instances, AVG Security Toolbar is often installed unexpectedly, as mentioned in this recent public rant on ZDnet.com. The author states the following:

I recently installed a software (PowerISO) and without consent it installed AVG toolbar and other software on my system which has completely modified my computer without my knowledge.

My browser (Chrome) now goes to your AVG homepage and Google search has also been replaced by AVG. The same is happening in Firefox and Internet Explorer. This has caused me hours in productivity and unnecessary frustration. The same is also happening after I uninstalled your toolbar (from inside Program and features)

I did NOT want this and modifying my computer like this is totally unacceptable. Your call yourself a anti-virus company while in fact the behavior is exactly that of a mal-ware which hijacks your browser and causes problems.

This is the type of software that sneaks onto users' computers because they hit the "Next" button without reading. Some would argue that this is their fault, and while I understand that point, it's still completely unacceptable to have checkboxes like this one checked by default…. You had the audacity to change my settings in the first place just because I was tricked into clicking a shady checkbox, why should I have to read a FAQ and manually revert them after? Do you have no respect for your user's time? I'm sure the programmer who wrote the program to change my settings in the first place could definitely write a uninstaller to revert them too. But you would not do that. It's a shame that of all the unscrupulous companies who would use such ploys, an anti-virus company like AVG is doing it instead! I'm sorry but this is just too fishy.

Even though the user's consent to install the AVG toolbar or default search is obtained during the installation process (in the user clicking the 'next' button), thousands of complaints litter the internet regarding AVG requiring the user to opt-out. It is thought of as a questionable practice. Many users, either pressed for time or not having an understanding of what they are truly installing, unwittingly click the "next" button to complete the antivirus installation.

Although the uninstall seems easy enough, thousands more complaints litter the internet complaining that default search has nested in their browsers and cannot be removed (Google search "AVG Default Search" or visit RipOffReport). Furthermore, even when a user goes to uninstall, AVG recommends that its default search remain on your system - another opt-out! This is a last ditch effort to hold on to the user. But what for?

Figure 3: Uninstall Process

(click to enlarge)Figure 3: Uninstall Process

Why try to hold onto the user at this stage, when he/she is requesting an uninstall? When searching a common key word such as "Kim Kardashian" you'll notice a key difference between an AVG Search and a Google Search:

Figure 4: AVG Secure Search (isearch.avg.com)Figure 4: AVG Secure Search (isearch.avg.com)
(click to enlarge)

(click to enlarge)

AVG search has three sponsored ads at the top and three sponsored ads at the bottom of the search results page, a total of six sponsored Ads. Typically, Google displays only two or three sponsored ad listings, contained in a yellow, highlighted area.

Figure 5: AVG Secure Search results (note the three sponsored ads at top and three at bottom)

(click to enlarge)

AVG's sponsored links are not contained in a highlighted box, potentially a clever trick to present sponsored ads as organic search results.

Based on a study conducted by Search Engine Watch, 53% of Organic Search clicks go to the first link. Search engine users overwhelmingly click on organic search results on Google and Bing by a margin of 94% to 6%. By presenting them in the manner Google displays organic search results, AVG appears to be trying to dupe its users into clicking into the sponsored links, for which it would be compensated.

Not Just a Checkbox: Opt-outs Have Reliable Effects on User Outcomes

AVG and others in the toolbar industry rely on users skipping over the pre-ticked checkboxes to achieve their desired install rates. They do it because it works. After all, if opt-ins snared users at rates similar to opt-out, why wouldn't they avoid the issue and default to opt-in?

At nearly every opportunity, consumers will "opt-in" at rates far less than those at which they "opt-out." This well-known behavioral phenomenon appears in many contexts and has been the basis of consumer protection laws and FTC enforcement actions - from overdraft fees to cell phone billing to online, post-transaction marketing. Opt-ins are the legal default in many arenas for the purpose of consumer protection.

Further evidence of the importance of opt-in vs. opt-out in decision psychology is observed in the following:

  1. Email: It is well known in email marketing that "opt-out" lists perform far worse - in terms of emails opened and quantity of unsubscribe requests received - as compared with "opt-in" lists, as opt-out recipients never explicitly requested to receive the messages. The gold standard in email is "double opt-in": First the user must request to be subscribed to a list, and must later confirm his desire once more.
  2. Banking: Despite aggressive promotion and, to some, misleading marketing campaigns, only 33% of consumers opted in to overdraft protection once the Federal Reserve began to require it.
  3. Organ Donation: Even the most ethically fraught of decisions, such as whether to donate your organs, is heavily influenced by the default choice, whether it is opt-out or opt-in. Quoting an article published in Science Magazine, Dan Ariely, author of Predictably Irrational, discussed what he called one of his favorite graphs in all of social science:

Figure 6: Rates of Consent to Organ Donation, Opt-Out vs. Opt-In

(click to enlarge)

AVG's rate of toolbar attachment to platform users is likely to crater if it is mandated to make opt-in the default, as opposed to opt-out. If the company were confident that users desired its toolbar and default search, it would happily default to opt-in, from opt-out, in light of the damage to its brand equity that is resulting from thousands of documented user complaints.

"Don't be Evil" - Google Toolbar Policy Update Coming on Feb 1

The slogan "Don't be evil" is ingrained in Google's DNA and is evident in the continuous evolution of its policies and algorithms, a devotion to constantly improving the user experience. It frequently updates its search services (e.g. Panda and Penguin updates), policies, and AdSense products. Very recently on Google's Q4 earnings call, Nikesh Arora, Senior Vice President, stated that during the fourth quarter of 2012 Google made changes in policy and enforcement that improved CPCs and search quality:

These enforcements had the effect of reducing ad clicks on the sites of certain AdSense for search partners. These policy updates are part of our ongoing work to improve user experiences on Google and on site in terms of using Google Search. Since these policies improve the experience of both users and advertisers, we firmly believe they are good for our business in the long-term… we've always had a policy. The policy has been that we want to make sure that whatever ads are presented in whatever way our traffic is routed to ads, it is done in the best interest of the user and we began to notice that they were sites and pages whereas we had too many ads in a page, so it became more restrictive and updated our policies for better enforcement and that has resulted in higher quality results for end users, it has reduced in some cases the monetization that some of our partners are seeing as a result of this enforcement and hence you are seeing the impact on the numbers. We just announced this policy in the past quarter that we just went through, so you are going to see the impact over the next few quarters. We've also implemented more stringent policies around downloadable apps, and that's why I think both those effects are going to stay with us for the year, but we think in the long-term is the right answer for us, it's the right answer for users and it's right answer for advertisers, so we think it's a good thing to do.

We should note that many companies have built their entire business models on monetizing Google search results. Although Google's best intention is to improve the user experience, sometimes this comes at the expense of its search or AdSense partners. One such partner, Local.com (LOCM), was significantly negatively impacted by the above-mentioned policy changes, as reported in a press release distributed on January 24, 2013; the company revised its fourth-quarter guidance to revenue of $20.9M, versus prior guidance of $22-23m, and adjusted EPS of ($0.04), versus prior guidance of $0.00. The reduction in second-half growth was attributed to "unexpected revenue per click (RPC) declines from our main ad partner coupled with previously announced fourth-quarter ad policy changes." Local.com was impacted significantly, and per Google, may be impacted for the next several quarters.

Google policy changes can have nasty consequences for companies reliant on Google-sourced revenue that get caught in the crosshairs. Given its seemingly questionable business practices in getting users of its antivirus products to download the hard-to-get-rid-of, revenue-generating AVG toolbar, might AVG be one of those companies? Undoubtedly, yes. Might AVG's primary growth engine, its Platform search business, be put to the test? Absolutely, yes.

Google is on the verge of announcing an update to its toolbar policy, something that has not been widely followed or discussed. We first learned of this from a Bloomberg article published on December 16, 2012. The article contends that Babylon and Perion (PERI), two Israeli companies whose businesses highly depend on monetization of the Google Toolbar, would be negatively impacted by the impending policy update:

Calcalist reported today companies such as Babylon and Perion Network may see a negative impact from Google's effort to keep companies from stealthily adding options to users' toolbars when they download software."

We learned of the date of the toolbar policy change, February 1, 2013, in reading another Bloomberg piece, in which Perion CEO Josef Mandelbaum stated, "Perion was asked to make the changes, which come into force Feb. 1, to guarantee transparency." The Google Toolbar policy change was even brought up during Yahoo's Q412 earnings conference call by Jason Helfstein at Oppenheimer & Co.:

…I want to ask about Google's pending Toolbar change. It would seem that's probably a positive benefit to Yahoo! and Bing with respect to how the policies are different. So can you comment if there's any expectation for a lift for that?

Yahoo CEO Marissa Mayer rightly responded, "On the Toolbar change from Google, we'd be remiss to offer comment on another company's product, so I'm not going to comment further there." Piecing all the excerpts together, we know that the Google Toolbar policy change is coming and that it will most likely reduce new installs, given that it will force "transparency" and is designed to keep companies from "stealthily" adding toolbars; we also know it will take effect on February 1, 2013.

Google's policy updates are aimed at increasing transparency for users that download 3rd-party software. Although it is not clear exactly what the rule changes will look like, we do know they are intended to enrich the user experience. We also know that amongst the biggest sources of user complaints are the dubious methods used by companies such as AVG to ensure their default search and toolbar extensions get installed. Looking at the Mozilla Firefox support site, many are labeling AVG's default search as malware. As previously discussed, because they are all "opt-out" (i.e. users manually have to uncheck the install boxes), and most users usually zoom through the installation process, scores of them have unexpectedly installed unwanted toolbars and have had their internet browser's homepage hijacked. And many users have documented their complaints that these companies have made it incredibly challenging to remove the toolbars.

I got this AVG nightmare after installing Firefox . I wasted 4 hours of my life trying to disable it. I did a regedit, and removed it from my system, and it still hijacked my internet explorer. After countless hours, and support from the entire internet community, i was able to disable it from hijacking my browser, but could not remove it somehow, the avg search engine remove button is disabled.I can remove anything but I can't remove the Avg search engine WTF??? any way to disable it, Go to Control panel- internet options- manage add ons-select AVG search engine- right click, disable it. if you can remove it, do It!!! THERE ARE SOME MANY FREE ANTIVIRUS SOFTWARE OUT THERE, DO NOT DOWNLOAD AVG, IT IS A FREAKIN' VIRUS!!!!!! i also DELETED firefox, until they can figure out how to manage their freakin' malware extensions.

Like Babylon and Perion's, AVG's growth ambitions are wholly dependent on its ability to monetize the Google Toolbar. But in December 2012, AVG's stock price significantly appreciated when it announced a search partnership agreement had been executed with Yahoo. On the associated conference call, management stated that it simply looked at this deal as "derisking revenue concentration" but that it wouldn't "necessarily add any incremental revenue":

…the search diversification strategy allows us to diversify at a user level. It's not necessarily tied to geos, meaning that I can have 2 or 3 providers within any given geo. And so with that, it would mean that we would decide which search to distribute to any given customer. Now it's important to note that we won't mix the search results so that they get a mixed feed. They will either be, at this point in time, either a Yahoo! customer … or a Google customer exclusively.

Since November 2010, AVG has used Google exclusively; and, it is widely recognized that Google's payout ratio in search is second to none. In fact, AVG itself saw its revenue per active platform user double when it switched from Yahoo to Google as its search partner back in November 2010, jumping from $0.51 in 2010 to $0.94 in 2011 (AVG 20F, 12/31/2011, p.61). One expects a transition back to Yahoo to work similarly in reverse.

Second-sourcing an inferior Yahoo search product with lower monetization rates goes against industry trends. AVG is preparing for Google toolbar policy changes, and we believe it is desperate for a solution to what is likely to manifest itself as a steep dive in the expected revenue growth rate. We believe a more correct market response to the announcement of a deal with Yahoo is hard-selling, not bidding up, AVG stock, right when the company's prospects are subject to greatest levels of uncertainty.

Google's policy updates are aimed at increasing transparency for users that download 3rd-party software. Although it is not clear exactly what the rule changes will look like, we do know they are intended to enrich the user experience. We also know that amongst the biggest sources of user complaints are the dubious methods used by companies such as AVG to ensure their default search and toolbar extensions get installed. Looking at the Mozilla Firefox support site, many are labeling AVG's default search as malware. As previously discussed, because they are all "opt-out" (i.e. users manually have to uncheck the install boxes), and most users usually zoom through the installation process, scores of them have unexpectedly installed unwanted toolbars and have had their internet browser's homepage hijacked. And many users have documented their complaints that these companies have made it incredibly challenging to remove the toolbars.

I got this AVG nightmare after installing Firefox . I wasted 4 hours of my life trying to disable it. I did a regedit, and removed it from my system, and it still hijacked my internet explorer. After countless hours, and support from the entire internet community, i was able to disable it from hijacking my browser, but could not remove it somehow, the avg search engine remove button is disabled.I can remove anything but I can't remove the Avg search engine WTF??? any way to disable it, Go to Control panel- internet options- manage add ons-select AVG search engine- right click, disable it. if you can remove it, do It!!! THERE ARE SOME MANY FREE ANTIVIRUS SOFTWARE OUT THERE, DO NOT DOWNLOAD AVG, IT IS A FREAKIN' VIRUS!!!!!! i also DELETED firefox, until they can figure out how to manage their freakin' malware extensions.

What if the GOOG policy were to move to more consent based, opt-in versus "opt-out"

If the GOOG policy updates mandate the toolbar companies adjust their methods of obtaining user consent from opt-out to opt-in, AVG's new user installs would be dramatically impacted and search traffic would fall precipitously. Further, if the internet community regards these toolbars and "hijacked home pages" as malware, why would anyone install them? Imagine, if an internet user is looking to download free AVG anti-virus software, why would he or she want to install 3rd-party search tools? All browsers including Firefox, Chrome and Internet Explorer have search already built into the address bar. Why install a cumbersome 3rd-party search when there is no value-add? An opt-out policy is likely to impact new user installs by at least 50%. This would have significant impact on AVG (whose fastest growing segment is its search-related Platform business), BBYL.IT (almost all its business is search) and PERI (more than 60% of sales from search).

Perion's CEO has come out and said these policy updates won't impact the company. However, AVG and BBYL.IT management have said nothing. Since the new GOOG policy changes will be announced Feb 1, 2013, no one knows exactly what will. But we have collected a great amount of data, and are confident in our assessment that the impact is likely to be a big negative for these companies, especially given what we have assessed throughout this report as questionable, user-damaging business practices - exactly what Google intends to put a halt to. I revert to the example of LOCM, which although in the display business, was hurt by the display ad policy update recently enforced by GOOG. I am sure LOCM was given pre-warning by Google of the new policy changes coming down the hatch prior to implementation (in fact, it revealed as much in its Q312 earnings announcement and Q312 10Q, warning of changes by its key traffic and monetization partner, Google). This would have given the company ample time to prepare etc, and yet still, it missed guidance.

Eventually all of these companies will either bust or figure out a way to work with new Google policies. But down the road, these policies are bound to get updated again, and then these companies will be impacted again.

Regardless, we are in the now, and right now we know Google's desire for its partners is to be more transparent (whether or not an "opt-out" model is rolled out) with the users of its products, and from that perspective, whatever comes is highly likely to impact the growth engines of many of these companies in the short-term.

AVG's Revenue Growth Expectations Warrant Reduction of 40%-50%

Should the upcoming policy changes materialize as we expect, there are two scenarios that could play out for AVG:

  1. Policy changes do take place, and AVG sticks with Google as a revenue partner, but fewer downloaders install the toolbar as a result of the switch to opt-in.
  2. Policy changes do take place, and AVG switches to Yahoo as a partner as a result. Yahoo will then allow current practices (opt-out) to continue, and it will monetize each search at rates 50% that of Google.

In either case, we expect both revenue and EBITDA are likely to fall short of consensus estimates. Per Bloomberg, consensus estimates of 2013 sales and EBITDA are approximately $403M and $117M, respectively. JPM projects that 2013 Platform Revenue (revenue from search monetization) will be $195M. These figures do not take into account the likely effects of the Feb 1, 2013, Google policy changes, and few of the analysts on the street appear to be aware of the upcoming changes; if they are, have decided not to publish or update their models. As noted above, Jason Helfstein at Oppenheimer & Co. raised the issue of these changes on the recent Q412 Yahoo earnings call, but, unfortunately, he does not cover AVG.

We've derived our revenue projections for the two above scenarios using the below critical assumptions:

(1) Quarterly churn rate for the current install base (installed prior to Feb 1, 2013): It is true that, even with the new policy change, AVG can rely on the existing installed base of users to maintain some portion of its platform revenue stream. Unfortunately, churn rates in the toolbar industry are exceedingly high. Guy Malachi, Chief Geek at Conduit, a large privately-held toolbar vendor, estimated in an answer on Quora that the typical lifespan of a toolbar is around two months on the low end to just over a year on the high end. A toolbar lifespan of just over a year translates to roughly a 35%/quarter churn rate. For conservatism, we'll assume a quarterly churn rate for existing customers of less than 15%.

(2) Quarterly churn rate for new users (installed after Feb 1, 2013): Because the new Google Toolbar policies are more transparent and consent-based, users who specifically opt-in to install the AVG Toolbar would more likely remain users longer. As a result, one would expect lower churn as compared with today's installed base of opt-out users who may have installed the toolbar unknowingly. We therefore apply a lower churn rate to new, opt-in users. The model assumes a quarterly churn rate of less than 8% for these new users going forward.

(3) Opt-in rate: The opt-in rate is measured as a percentage of the total new installs: the fraction of the total users installing the software that also choose to install the toolbar. To be conservative, we estimate an opt-in rate of 65%. In reality, this figure will likely be far lower.

(4) Google monetization versus Yahoo: It is well known in the industry that Yahoo generates significantly less revenue on average for its search traffic than does Google (we have heard that Yahoo monetizes at ~50% less than Google, and perhaps worse in international markets). There are a number of reasons for this, including a lower average cost per click. The model assumes Yahoo monetizes at a rate that is 50% of what Google achieves.

Using the above assumptions and running sensitivity analysis on the opt-in rate and Yahoo's level of monetization (as compared with Google's), we estimate 2013 Platform-derived revenue ($MM):

(click to enlarge)

Scenarios A and B both yield a revenue projection substantially lower than JP Morgan's forecast for 2013 platform revenue. The key drivers, unsurprisingly, are the change in opt-in rates and the gap between Yahoo's and Google's monetization capability. For scenarios A and B, the model predicts a range for 2013 revenue of between $36M and $75M, respectively, again using conservative assumptions. At the low end (Scenario B), AVG remains with Google as a search partner, but suffers reduced toolbar installs as the opt-in rate could be closer to 25% (or less) due to new policy changes. At the high end (Scenario A), if AVG decides to maintain its search traffic by switching to Yahoo as a search partner-allowing it to maintain default install rates via opt-out vs. opt-in-its monetization rate could decline ~50% compared with Google. At a 65% opt-in rate and monetization = 50% of today's level, revenue hit $75M.

No matter whether the upper or lower bound seems more likely-be it $36M (opt-in =25% and monetization = 100%) or $75M (opt-in = 65% and monetization = 50%) - the company's platform revenue could significantly miss JPM's 2013 estimates, which we assume are representative of the street's consensus. We suspect AVG management may have conducted a similar scenario analysis and thus announced the surprising Yahoo search partnership in Dec 2012.

JPM estimates that 2013 revenues for AVG's subscription and platform base business are approximately $212M and $195M respectively for a total topline of $407M. We estimate the 2013 revenue range between $248M and $287M. Current consensus 2013 EBITDA margins = 29% and EV/EBITDA = 7.39x. Applying the consensus EBITDA margin and multiple to our revenue projections results in an estimated EBITDA range of between $71M and $83M, and enterprise value between $530M and $614M. Thus, the implied market capitalization and target price would between $399M and $569M, or $7.34/share and $10.28/share respectively.

The current share price is $14.65. Based on the Google policy change on Feb 1, 2013 and coming browser changes (see appendix), we believe the shares should be trading between $7.34 and $10.28. We encourage the reader to conduct his or her analysis. The figures are summarized below.

Appendix 1: It's Not Just Opt-Out vs. Opt-in: AVG is Being Evicted from its Market Opportunities

Beyond Google's forthcoming switch to potentially make users explicitly "opt-in" to download associated toolbars, other browser and operating system changes might similarly diminish install and retention rates.

A recent article in ZDNet lays out the coming changes. First, "[b]eginning with Internet Explorer 9, new toolbars and other add-ons are disabled by default. You must specifically enable them before they're active." Similarly, "Mozilla Firefox has a similar add-on approval feature."

More worrisome for toolbar vendors, Chrome 25, released in beta on Jan 14, 2013, makes several highly significant changes to how extensions can be installed/activated.

  1. Previously, it had been possible for 3rd-party applications (like AVG) to silently install extensions into Chrome on Windows using the registry. As Google's blog notes, "[T]his feature has been widely abused by third parties to silently install extensions into Chrome without proper acknowledgment from users." As a result, such silent installs will now be disallowed.
  2. New extensions installed by 3rd-party programs will be disabled by default. Users now have to click on chrome menu, where they are presented with the option to enable the extension or remove it from their computer.

    (click to enlarge)

  3. In addition, all extensions previously installed using external deployment options will be automatically disabled. Chrome will show a one-time prompt to allow the re-enabling of any of the extensions: (click to enlarge)

In 2012, Chrome became the most popular browser worldwide (and continues to gain marketshare):

(click to enlarge)

Given how complex it is today for users to remove AVG's toolbars (6-9 specific steps) vs. a one-click uninstall, it's hard to imagine that these changes won't impact the rates at which users install and keep the company's platform toolbars running.

Appendix 2: More Complaints

(click to enlarge)

Source: AVG: Feb 1st Google Policy Updates Threaten AVG's Growth Engine, Signals Steep Downside