There are plenty of good reasons why Google is going after browser market share aggressively, why Mozilla is stepping up and following Google and there are good reasons to believe that Microsoft's IE may be caught between the wheels and endanger Microsoft's future product strategy. In fact, the underlying technology in Chrome will be critical to Google's success and IE's technology and reach will largely define Microsoft's product plans and flexibility in the next decade.
I will use a very recent example to make my point. Google recently unlocked its SPDY HTTP replacements and extensions, which now works in any available version of Chrome as well as all Google properties (I am not aware of any other sites, even if Google offers the code for free and said that it will open source it). It is essentially a way to reduce the latency that is built into HTTP and slow down the page loading time. It batches server requests and allows a server to act without having to wait for a client request. The effect are dramatically increased page load times on sites such as Gmail, Google Docs or even Adsense. You can try the feature by comparing Chrome to IE and Firefox and viewing the SPDY connections via chrome://net-internals (URL bar request).
While the feature will be made available to other browser makers, it showcases the power of fast-paced innovation and how a browser can take advantage of conceivably proprietary technology to accelerate websites - and services. The browser really isn't what we generally perceive it to be. It is not a primary application to navigate the web. It is merely an interface and toolkit that will act as an operating system to run applications and services. Imagine this: If Chrome is able to run cloud services much faster than IE, and if Google's service are fine-tuned to this capability, would you use IE? And, if that is the case, would you use Microsoft's cloud services, if Google Docs is comparable in its core feature set, but magnitudes faster than Office 365?
Google is not really hiding the fact that Chrome is an operating system. Chrome OS is virtually indistinguishable from Chrome for the user and there is little doubt that Google will be driving Chrome much deeper in the consumer space. For Google, the cloud strategy heavily depends on the reach and capability of Chrome. If Chrome can continue to gain market reach and market share, it will be easier for Google to establish itself next to Microsoft in highly profitable cloud services - especially in the productivity software segment.
Mozilla has an entirely different motivation. Market share and usage share directly translates into ad revenue and user revenue (sourced mainly from Google.) Mozilla will have a growing platform problem as the browser transition from a primary app to just an app on some devices and into a cloud OS surface for other devices. Mozilla does not have the platform it needs to build Firefox into an OS-like environment and may increasingly be seen as an alternative to IE and Chrome. However, Firefox is making the right move to develop Firefox on a faster pace, at least as far as perception is concerned, and keep the software fresh.
Microsoft, on the other hand, is giving confusing signals and I am not sure if Microsoft is developing a major strike in the background or if it is sitting on its laurels of IE9 - which would mean that IE10 won't be here before March 2013. It is clear that IE9 means a lot to Microsoft and its hardware acceleration engine has not been built just because Microsoft wanted to be nice to you and me. If Microsoft was smart, the engine is tied to Microsoft's upcoming cloud services, such as Office 365 as well as its Windows 8 App Store. It is an engine that is designed to run demanding and highly complex apps within your browser.
However, Microsoft made the decision to only support Windows Vista SP2 and Windows 7, which jeopardizes its overall market opportunity. The company's future depends on Windows XP - Windows 7 transitions more than we may be able to understand right now as the company moves more and more into a service and cloud model as well. IE7 and IE8 are virtually useless as cloud interfaces and IE9 is the key to success for Microsoft. Perhaps that is the reason that Microsoft highlighted the usage share of IE9 on Windows 7 - as this is what really counts for the company - and not the usage share on Windows XP or Vista. I remain cautious on IE9's overall opportunity, but from a software perspective, Microsoft cannot afford IE9 to fail.
The platform game makes the browser an incredibly valuable element in the strategies of Microsoft and Google. Google is rumored to have given the new Chrome chief up to $30 - $50 billion as incentive to develop Chrome into a major force. If you think about the possible reward and Google's opportunity, that could be a reasonable investment. In the end, if you own the browser, and play a clever game, you will own the cloud.