Google’s rising browser market share is critical for its advertising revenue growth
Google generates more than 90% of its revenue from online advertising. The majority of this revenue come from search advertising. So it’s important for Google that users keep using its search engine more on both desktop and mobile devices. According to a report from Adobe (ADBE) Digital Index, Google (GOOGL) has surpassed Microsoft (MSFT) in U.S. browser market share. Google doesn’t lead the U.S. browser market either on desktop or mobile devices alone. But it’s a leader when we combine both device classes. Leadership in the browser market could help Google increase its core search market share, as Google makes it easy for users to search for information through its browsers, Chrome and Android.
Google is the dominant U.S. core search market player
According to a report from Comscore and as the chart above shows, Google is by far the leader in the core search market, with a share of about 68%. Meanwhile, Microsoft and Yahoo (YHOO) are smaller players. But Google’s main issue is that it’s way behind Apple (AAPL) in the mobile browser market. To make matters worse, Apple announced that Microsoft’s Bing will be the default search engine for the redesigned Spotlight search feature on the upcoming iOS 8 and OS X Yosemite. Bing could replace Google as Apple’s default search engine.
Mobile search is becoming an important component of overall digital search ad spending in the U.S. According to eMarketer, the mobile ad search market was about 25% of overall digital search ad spending in the U.S. in 2013. But mobile search could contribute more than half of the overall spending by 2015. This means Apple’s rising presence in the mobile space is good news for Microsoft. But it’s bad news for Google.
Android’s increasing presence could help Google
Enterprises and government organizations consider security extremely important. But they perceive Android as an insecure platform. To overcome this issue, Google’s next Android version will integrate with Samsung’s (SSNLF) Knox technology to increase all Android devices’ security. Samsung’s Knox has mobile security certifications from key departments of the U.S. government. Knox would be a good security technology for Android. Certifications will certainly help Android earn a reputation as a secure platform. So Knox will help Android gain presence with enterprises and government organizations.
Then, in another surprising move, Microsoft introduced the Nokia X2 smartphone based on Android a few days back. This move seems surprising, given Microsoft’s tiny presence in the smartphone OS market. But Android’s abundance of apps could help Microsoft sell more smartphones, attracting users to Microsoft’s own paid cloud services. This move would also be good for Android since it helps increase Android’s presence.