Entry into Open Source: Evidence from Web Browsers
Open source software projects are often founded and governed by private companies. Yet, we know little about performance implications and how this affects the open source ecosystem. In this paper, we study Microsoft’s decision to adopt the open source technology Chromium for the web browser Edge in 2018, leading to the release of a completely redesigned product in 2020. We compare Edge to other Chromium- and non-Chromium-based web browsers in terms of product quality and market performance, and study the contributions of corporate as well as external developers to the respective open source projects. We find that Microsoft's switch to Chromium technology dramatically increases the number of functionalities of Edge, but comes at the cost of reduced page loading speed. With Chromium-based Edge, Microsoft adopts faster release cycles and we document enhanced security of all Chromium-based browsers because of more reporting and fixing of vulnerabilities after the first Chromium-based version of Edge is released. With the new technology, Edge can win 8 percentage points in market share. However, we document a decrease in contributions of external developers in the Chromium project, which is partially compensated by increased efforts of Microsoft. We discuss the implications of our results for managers as well as for policy around open source software.