Why Google's Chrome Is One of the Most Valuable Assets the Company Owns

This article originally appeared on Real Money on Nov. 11, 2016.

As the company has been prone to brag from time to time, Alphabet's (GOOGL)  Google has seven services that each claim over a billion monthly active users (MAUs): Google Search, Google Maps, YouTube, Android, Gmail, the Play Store and Google Chrome.

Of the seven, Google Chrome is arguably the one that gets the least attention and praise. After all, web browsers are more than two decades old now, and a large portion of Internet usage has migrated to apps (smartphone apps particularly).

But as new disclosures help show, Chrome's momentum remains quite strong, and the browser's strategic value to Google is as big as ever.

At its annual Chrome Dev Summit, Google announced there are now over 2 billion Chrome browsers in active use. Actively-used browsers aren't the same as active users, since many users rely on Chrome on multiple devices, but the figure does highlight how ubiquitous Chrome has become thanks to a high PC browser share, a healthy iOS presence and (most importantly) the fact Chrome is pre-installed on every phone running Google's version of Android.

The figure meshes with market share data from web analytics provider StatCounter: The firm estimates Chrome had a 50.6% browser market share in September across PCs, mobile devices and consoles. That's a new high, and easily dwarfs the 13.7% share claimed by the second-most popular browser, Apple's  (AAPL) Safari.

Google also declared it won't be building an ad-blocker into Chrome, and would prefer to work with the ad industry on creating ads that deliver a better user experience. And the company outlined its plans to to have Chrome support progressive web apps (PWAs) that deliver a mobile app-like experience within browsers. Mozilla's Firefox and Microsoft's (MSFT) Edge also support PWAs. Apple, however, doesn't yet support them either within Safari or for third-party browsers running on iOS.

While Chrome is available for free, the fact it's used on 2 billion-plus devices might be adding billions to Google's bottom line, for two reasons.

First, by having Google as its default search engine and even showing a Google search bar when a new tab is opened, Chrome has strengthened Google's search share, and by proxy the company's core search ad business. Yahoo! (YHOO) is the default search engine for Firefox, and Bing is naturally the default engine for Microsoft's Edge and Internet Explorer.

Second, Google keeps all of the revenue generated by Google Search ad clicks made via Chrome. The same doesn't often hold for other browsers for which Google is the default engine, due to the revenue-sharing payments the company has to make to browser owners. Earlier this year, a court document revealed Google made $1 billion worth of such payments to Apple in 2014. Google is the default engine for Safari, and held a similar role for Apple's Spotlight search feature until late 2014, when it was displaced by Bing.

Google's ad-blocking plans for Chrome (or lack thereof) are also evidence of the browser's financial value, given the threat ad-blocking presents to the world's biggest online ad company. The PC version of Chrome does allows users to install third-party ad-blockers. The most popular of these, AdBlock Plus, doesn't block Google search ads, but does block YouTube ads, as well as various Google ads shown on third-party sites.

Meanwhile, Chrome's giant mobile presence provide Google with the clout to drive adoption among browser makers of solutions such as PWAs, which aim to keep mobile users turning to browsers (and thus Google Search) in an app-centric smartphone landscape. Google's AMP initiative, which allows mobile web pages from publisher partners to load almost instantly, also fits this description.

Much like Android, Chrome has been a very effective Trojan horse for Google. On paper, neither product produces a cent of revenue for the company. In practice, however, they're two of the most valuable assets Google possesses.

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