At Union Square Ventures we have backed a couple of companies that use browser plugins at the core of their services (Adaptive Blue, Zemanta). We have always been concerned about the potentially lower sign-up rates from requiring someone to install a plugin. The installation process on Firefox required an onerous restart (even for updates to already installed plugins!). In fact, our concern has been so significant that we have passed on a few opportunities that had plugins as central to their strategy. I believe that this could change dramatically in the near term. First, Chrome has an extension architecture that does not require a restart and allows for dynamic updates to plugins. Second, people seem to have no problem with installing apps on their phones. So what’s missing is a change in terminology - let’s call plugins browser apps - and a marketplace. The latter can help not just with discovery but also with ratings and safety. Now before anyone can even start to mention HTML5 - yes it’s great, but a plugin, I mean app, can still do more because it is user centric, not site centric. For instance, extension.fm can deliver its experience only because it sees music on all sites I go to!
