Can You Build A Business On Browser Extensions?
This is something I've been pondering a bit lately. Certainly there are some notable successes with browser extensions:
- StumbleUpon - one of the most popular Firefox extensions was sold to eBay last year for a price in the neighborhood of $50mm
- Clipmarks - another popular Firefox extension was sold to Forbes last year for an undisclosed amount, rumored to be in the high single digits or low teens
- Delicious - thought not only a browser extension, much of the activity on Delicious comes through the Firefox extension. Delicious was sold to Yahoo! for $30mm, but I continue to believe that there was a viable sustainable business opportunity with Delicious, we just didn't get the opportunity to go for it.
Here's the 100 most popular Firefox extensions. I currently use three of them; downloadthemall, delicious, and foxytunes. I have, at one time or another, tried about one quarter of the top 100. All three of the companies mentioned above that have been sold have extensions in the top 100. But its interesting to note that none of them are top 10 or even top 20. Stumbleupon is about the 20th most popular extension, Delicious is about the 30th, and Clipmarks is about the 50th.
Many of the most popular extensions are blockers (ads, script, flash) or download helpers (audio, video, etc). It's hard to see how one builds a business around blocking or downloading, but I am sure there are people working hard to figure that out. AdBlockPlus gets almost 300k downloads per week and has been downloaded over 21mm times. That translates into a lot of active users. There surely is some sort of business opportunity there.
In general, browser extensions are pretty geeky. Just spend some time on that top 100 list and you'll see stuff like ftp tools, greasemonkey, and debugers. That's not mainstream stuff.
We have one company that started out as a browser extension, Adaptive Blue. Their Blue Organizer extension is the 102nd most popular extension and has been downloaded almost 1.4mm times and gets about 16k downloads per week. But even so, while we were evaluating Adaptive Blue as an investment opportunity we encouraged Alex Iskold and his team to broaden the base of the business and the SmartLinks service is partly a result of those conversations.
We felt then, and I continue to feel, that a browser extension can be a useful way to get your technology into the market, particularly to the power user segment of the market, but it should not be the only way you get your technology into the market.
Here's a screenshot of all the extensions I am currently using:
Leaving off the talkback, tamper data, and dom inspector add-ons, I currently use 11 extensions. Of these, seven are offered by companies that have other services (Adaptive Blue, Delicious, FoxyTunes, Google, Mahalo, Skydeck, deluux, and FoxyTunes again). Three are offered by developers who only offer their technology via a browser extension (downloadthemall, screengrab, and zemanta).
I don't know if I am representative, but that little exercise shows that many useful browser extensions are offered by companies as a supplement or compliment to their existing web-based service. Mahalo is a good example of that. I could go to Mahalo and do searches, but instead I've installed Mahalo Follow which just inserts some Mahalo results into my Google searches. That's smart on their part and a good utility for me.
So back to the original question I posed at the beginning of this post. Can you build a business on browser extensions? Although a few companies have gotten into the market via extensions and gotten sold for good money, I think the answer is largely no. A browser extension is a smart way to enter the market, particularly if you want to reach power users early on, but you need to figure out how to build a broader service offering with your technology in order to reach a mainstream audience if you really want to build something big and sustainable.