Search and browser markets intertwined? Here's the proof.

Jan.24.05 | About: Alphabet Inc. (GOOG)

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:

  1. 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.
  2. Bugs in Internet Explorer are probably
    good for Firefox, but could pose a hidden threat to Google and Yahoo!.
  3. Firefox's superior control of pop-up ads could reduce ad revenues.
  4. 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.