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According to computer trade press reports, Mozilla's Firefox web browser has passed the magical 10% market share figure. What does this mean and why does it matter?

First of all what's magical about 10% market share? Well, for one thing it's double digits. For another, market share for a web browser is important because of the revenue deals that it can generate with paid search. For instance, every time an end-user clicks on an advertisement displayed via Google, resulting from a search through the Google search bar on Firefox, Mozilla rings up a sale. In 2005 it is reported that Mozilla had $70 million USD in search related revenues. On that count it means for Firefox that every one percent of market share is worth $7 million USD in search related revenue.

For Opera with its emphasis on cell phone browsing the revenue equation has several parts. First, customers are likely to spend more time using the cell phone, which is revenue for the network operator. Second they are more likely to click on search related advertising which is revenue for Opera. Third, Opera gets licensing revenues for deals that put its Mini software on cell phones.

Mozilla does not have a mobile browser for cell phones that is a completed shipped product. Opera's Mini software for cell phone browsing may offer the firm a strategic advantage that takes it out some of the pressure of head-to-head competition for desktop market share.

Opera's total revenue in 2005 was about $23M USD. It is difficult to break out the desktop revenues related to search because the firm does not report them that way. Significantly, Opera changed its desktop revenue model in Fall 2005 dropping the $39 USD licensing fee for the desktop browser and opting for paid search revenues by building market share. Opera inked search revenue deals for the desktop and cell phone browsers with Google and other search engines. In 2005 Opera's revenues from Internet devices increased by $3.2 million USD over 2004.

Second, market share is important because it attracts independent application developers. Mozilla has long promoted the development of open source extensions to its browser. Since programmers have to make a buck to live, the develop applications for the "platform," e.g., browser, that has the greatest market share because that's where the money is. As Mozilla's market share grows, the number of extensions available for it reinforce its attractiveness to end-users. The more attractive a product is, the more people use it, and the more search related revenues it gets. So, it is in Mozilla's interests to promote extensions to build market share.

Opera's current shipped desktop browser 8.54 doesn't support extensions like the Firefox browser. That will change with version 9 of the Opera desktop browser code named "Merlin." Opera will offer widgets, which are desktop applications that work with the browser. Opera Widgets are small web applications run directly on a user’s desktop. With Opera Widgets you can quickly write small, focused applications that perform useful tasks. They can interact with online services such as news feeds, dictionaries or search engines.

"Merlin" is currently in a pre-beta stage called "Technology Preview." Weekly builds are available for anyone who wants an early look at the product. The Weekly Builds are snapshots, they are not as thoroughly tested as a Technology Preview or a Public Beta. You should only use these builds if you are not afraid of losing data (e-mail, bookmarks, anything) or crashing your computer.

Independent software developers will be able to make widgets that work with Opera 9. Widgets are a terrific way to address the market share building power of "extensions." It will be interesting to see if Opera widgets have the same attractive power to independent software developers as Mozilla extensions.

Both browser companies are in a race to build market share, and there is only one place it can come from, and that is at Microsoft's expense. The Redmond, WA, software giant is currently stuck in the mud with delays announced last month for the ship dates for the new desktop operating system code named "Vista" which includes Internet Explorer 7. Every month of delay by Microsoft is more time for Mozilla and Opera to build market share. It also gives Apple Computer, with its new Intel-based Macs, a window of opportunity to build market share. These delays won't last forever. Once Vista does ship the throw weight of Microsoft's marketing efforts will have an impact. Whether Mozilla's market share is retained or grows, and what happens with Opera 9, are developments to be watched with interest.

For the statistically curious, here is a summary of recent browser market share statistics.

Report: Firefox Past 10 Percent Share
By Nate Mook, BetaNews
April 4, 2006, 4:54 PM

Web analytics firm Net Applications announced Monday that the open source Firefox browser has finally passed 10 percent market share, according to the firm's statistics for March. The 10.05 percent usage was up from 9.75 percent in February. Microsoft's Internet Explorer still holds a commanding lead with 84.7 percent of the market, Net Applications said.

However, according to another analytics firm, Firefox had already surpassed 10 percent market share last November. OneStat.com reported at the time that Mozilla browsers had reached 11.51 percent usage globally based on a sample of two million users from 100 companies.

Despite the conflicting numbers, it's clear that Firefox continues to gain a foothold -- especially overseas. Internet Explorer, meanwhile, is continuing its slow slide. The ubiquitous browser held 86 percent of the market last November, and its market share of the browser has fallen every month except one since December 2004, when it controlled 90.31 percent of the market.
Over the last year, Firefox has gained an additional 3.34 percent of the market.

Too little, too late says Vincent Vizzaccaro, executive vice president of marketing and strategic relationships at Net Applications about Opera's decision to drop licensing fees and advertising from its web browser in version 8.5.

[snip]

In late September, the Norwegian developer of Opera began giving away its ad-free browser. "It was a good idea, but too late," Vizzaccaro said. "It they'd done that six months ago, 12 months ago, it might have been different. But Firefox has grabbed those who wanted to make the switch."

Opera's market share declined in September to 0.51 percent from August's 0.62 percent, according to Net Applications numbers.

He also said that Netscape was stealing market share from Firefox and from Internet Explorer with the release of version 8.02 which now identifies itself uniquely.

Opera tunes up to overtake Firefox

Opera tunes up to overtake Firefox
By John Leyden (john.leyden at theregister.co.uk)
Published Friday 30th September 2005 16:55 GMT

Interview Opera is looking to mobilise its existing community of users in order to overtake Firefox as the number two browser on the desktop. Last week, Opera decided to give away an ad-free version of its browser for the first time. Jon von Tetzchner, chief exec of Opera Software, said that by removing the inclusion of banner ads from the free version of its browser it was removing the biggest reason users might have for avoiding its software.

The Norwegian software developer claims 2.4m downloads of the ad-free version of the browser since 20 September, when Opera made the big move. Von Tetzchner disputes figures from web analytics firms which put Opera's browser market share down at around 2-3 per cent or lower while Firefox has a market share of around 8.8 per cent. These figures can be misleading because users can change Opera to present itself as Internet Explorer in order to gain access to sites that fail to follow web standards.

Opera's market share stands at around five per cent in many countries such as Norway, Germany, Russia and Japan, according to von Tetzchner, who said the goal of the firm is to reach double digits in as many places of the world as possible. "We have to be patient and we won't reach 10 per cent before the end of the year, but we might do it before the end of next year," he said. Opera already has between 10-15m active users, he added.

Washington Post

Closer Look
Browsers Battle for Second Place

By Mike Musgrove
Washington Post Staff Writer
Sunday, September 25, 2005; Page F07

In the Internet-browser game, the idea of beating No. 1 Microsoft, whose Internet Explorer comes automatically bundled on most Windows computers, is so far out of reach that other players try for the next best thing: second place.

Opera, the Norway-based company that has created an alternative browser for computers and mobile devices, has visions of unseating Mozilla Corp., maker of the Firefox browser, for that second-place position.

To do that, Opera started doing last week what Microsoft and Mozilla ( http://www.mozilla.org/ ) have been doing for some time: giving away the flagship product. Previously, Opera ( http://www.opera.com/ ) had offered two versions of its desktop browser -- a free one supported by ads placed in the browser and a $39 ad-free version.

Giving away the product doesn't automatically mean the company will come into hard financial times. The browser has a built-in search function that allows users to consult Google without opening up another window. Every time a user searches through the Google tool, the search engine pays Opera.