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Microsoft Tries to Slow Down Google: Releases a Firefox Video Plug-In

The release of a Microsoft H.264 video plug-in for Mozilla Firefox has left some scratching their heads. What reason could CEO Steve Ballmer and his brain trust have for supporting software that has helped reduce Internet Explorer's market dominance? There are several, including tripping up Google (GOOG).

Microsoft management has apparently learned that winning a skirmish can cause you to lose a more important battle. It's more in the company's interest to thwart Google than it is to hinder Firefox, which would deliver little of value. So, for once, the company has swallowed its ego and more obvious plans for world domination to help slow its chief competitor. It's a smart and subtle use of product marketing as a defensive weapon.

Microsoft and Apple (AAPL) had apparently previously teamed up to kill off the Firefox and Opera browsers earlier this year. Both pushed for H.264 as the video standard for HTML 5, the future of browsers, and, as well, many Web-delivered applications. Inclusion of the standard in a browser requires a license fee that is immaterial to a Microsoft or Apple or Google (all three support H.264), but substantial to Mozilla.

And yet, by making the add-on available, Microsoft, which already has a license for the standard, essentially underwrote the ability of Firefox to compete with the flusher browser vendors. But Firefox has been Microsoft's big rival for browser market share, so why support an enemy? There are at least three reasons:

  • There is no direct revenue in browsers, and yet the European Union has already smacked Microsoft for potentially breaking competitive business rules by not offering a choice of browsers. Microsoft has instituted a program to do so in Europe and it likely wants a strong Firefox to avoid further charges of market domination.
  • Google has positioned its Chrome and Chrome OS strategy to attack Microsoft. The latter doesn't want to see a sidelined Firefox open more doors for Chrome.
  • The add-on is great PR and makes Microsoft look more reasonable than in the past.
  • Microsoft is an H.264 advocate. What better way to remove adoption roadblocks than by enabling a browser with significant market share to use it?
  • It's a smart move that costs virtually nothing, ensures difficulty for a competitor, keeps regulators happy, and makes Microsoft look good. A smart decision.

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