Understanding the relationship between the pay-per-click advertising market (particularly paid search) and the browser market is critical for investors. Four issues illustrate the intersection of the two markets:
- Microsoft's domination of the PC client software market poses a
signficant threat to Google and Yahoo!. This will force Google into the browser market.
- Bugs in Internet Explorer are probably
good for Firefox, but could pose a hidden threat to Google and Yahoo!.
- Firefox's superior control of pop-up ads could reduce ad revenues.
- Growing of Firefox adoption has implications for search market share.
Now comes the ultimate evidence that the two markets are intertwined: Ben Goodger, the lead engineer on Firefox, has been hired by Google as of January 10th. (Via Google Blogoscoped and Search Engine Watch.) This follows earlier reports that Google hired a browser team.
Now investors need to figure out what the implications of this are. Comments welcome below.