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Why does Google own DNS, Chrome and Google Analytics
Imagine that you have just created the best possible tool to let people find information in the large mess of information freely floating around(Read Google). You have a deep feeling of satisfaction and feel you have created something substantial that all the people need and has immense value. It is true as well but then the stark reality of the world hits you in the face. You realize that despite having millions of users (maybe growing like 2-3x every quarter), the company will fail. Why you ask yourself? Well the simple reason being you are not making money and it is a costly affair to manage all that information and serve people’s queries. But you can’t ask people for money as despite being so valuable people won’t pay for it because of multiple reasons -
It is still the early years of the internet and most people won’t be comfortable paying for it. The whole concept of subscriptions doesn’t really exist
People find it useful to search for information using your tool but it would be very difficult to put a value on its utility.
So now what do you do? You see that Ads is a good way of making money. Your competitors are doing it and so should you. But to be better at serving ads, you need more and more context. While you have the information on which link the user clicked, you don’t know about users who directly go to the websites. Also, you don’t know what they are doing on the website, how much time they spend and whether their interaction was meaningful or not. So to do that, you create a free analytics tool that can be integrated in the websites for free and help other businesses understand their customer behavior (Read Google Analytics). You give it for free because it is far more valuable to you that billions of websites use this tool rather than something else so that you have access to the data (not all data but key parameters).
The data collected through Google Analytics helps Google refine its advertising services, target audiences more effectively, and provide valuable insights to website owners. This indirectly supports Google's advertising business.
Now you have access to two sets of data - people going through your search results and people using your analytics tool. You can now serve your users better as you have more context. However, there are billions of other websites not using your analytics tool and people are going to those websites directly or through other feeds. What do you do? You create a tool which anyone has to use to visit a website (Read Chrome). How do you do it? Well, you are already making billions so you create a new team, get some people from FOSS projects (Read Firefox) and ask them to create the best browser possible. Then using your marketing muscle, make it so popular that the first thing people do is download your browser. Slowly and steadily your market share increases and you have access to more data.
Google Chrome, while not directly generating revenue, plays a strategic role in Google's ecosystem. Chrome helps Google gather browsing data, which can be used to improve search results, enhance user experience, and refine advertising targeting. Additionally, Chrome encourages users to engage with Google services like search, Gmail, Google Docs, and more. While the browser itself may not generate direct revenue, it serves as a gateway to other Google services, which can contribute to Google's overall revenue.
Still there is a set of data not accessible to you - People not going through your search, not using your browser and browsing websites not using Google Analytics. So now what do you do? You create a DNS service, everyone uses DNS even other websites and browsers. So more data. By processing a significant portion of global DNS queries, Google can gather data on internet usage patterns and potentially improve its services. Additionally, offering a reliable DNS service enhances Google's image as a provider of valuable and trustworthy internet services.
The reason I believe in this narrative is simple - Google is a for profit, listed company. It has be to capital efficient. It cannot spend money on activities that are not making profit in some way or the other. Chrome, DNS, Google Analytics all are cost centers for Google and would make sense only if they are feeding into some of their Profit making businesses.
A validation to this hypothesis is the recent change by Chrome which will in a way allow them to share your browsing history and other details to advertisers. More details here. Similar changes will happen in future too as they now dominate the browser as well as Mobile internet market, so they can go ahead and make these changes and developers will have no option but to adjust as the end users are using Chrome and Android.
By providing these tools for free, Google not only maintains its position as a trusted internet companion but also gains access to invaluable user data. This data, in turn, fuels the refinement of its advertising services, making Google's core business even more profitable. It's a carefully orchestrated dance between providing value to users and capitalizing on the digital breadcrumbs they leave behind.
As Google continues to evolve and adapt to the changing tech landscape, we can expect further innovations and strategic moves. The recent changes to Chrome's data sharing policies may just be the beginning of a new era in advertising.