This question really baffles me. What advantage does making it Open Source bring? Aren't they worried someone can learn the secrets in their code and make a competing version of chrome?
Companies produce open source software for a variety of reasons, including marketing and developer relations. But I don't want to speculate. Instead, I want to point out three aspects:
- Browsers don't have any secrets that must be protected.
- Chromium is derived from a tradition of open source components.
- Google benefits from the reach and impact that open source enables.
When Google created Chrome/Chromium, they didn't start from scratch. Building browser engines is expensive! Instead, they looked at the market situation at the time (2008):
- Internet Explorer had won the first browser war (late 90s) and had about 70% market share, but was somewhat stagnant since then. Google depends on the web to sell ads, but IE wasn't a very attractive portal to the web.
- Firefox was an open source browser that had about 25% market share. The Firefox code was based on the Netscape browser which had lost the first browser war – but was then open-sourced in an experiment: a bet that working together was better than working against each other. While FF could never match IE's popularity (because it didn't come pre-installed on Windows), it was the browser of choice for anyone who had a choice. But Google didn't want to bet the future of their company on another organization's browser.
- The remaining market share was split between Opera and Safari. Safari was based on the WebKit rendering engine, which had recently been open-sourced.
WebKit was actually a fork of the KDE project's KHTML browser engine. There was some collaboration between WebKit and KHTML but at some point Apple found it easier to completely open-source their code: working together is easier. After all, Apple was not in the business of making browser engines but in the business of selling devices that need a pre-installed browser.
There wasn't any proprietary magic in Chromium that was worth keeping secret. V8 might have been such a thing, but Google didn't need a better engine for themselves, they needed a better web for themselves: a medium to sell ads through. This was a “platform play”.
In their release announcement, the Chromium team explains their reason for publishing the code under a permissive BSD license.
Primarily it's because one of the fundamental goals of the Chromium project is to help drive the web forward. Open source projects like Firefox and WebKit have led the way in defining the next generation of web technologies and standards, and we felt the best way we could help was to follow suit, and be as open as we could. To be clear, improving the web in this way also has some clear benefits for us as a company. With a richer set of APIs we can build more interesting apps allowing people to do more online. The more people do online, the more they can use our services. […]
We believe that open source works not only because it allows people to join us and improve our products, but also (and more importantly) because it means other projects are able to use the code we've developed.
Note the mention of Firefox and WebKit but not Internet Explorer, which was perceived as holding the web back. The innovators in the space were open source, so Chromium also went open source. This openness helped the new browser gain rapid adoption with technology enthusiasts and later with the mainstream. This openness (paired with Google's deep pockets) helped Google become a heavyweight in shaping the future direction of the web. By becoming a major browser maker, they could help new technologies gain acceptance by implementing them themselves.
Ultimately, Chrome did become the biggest browser, and with this some things changed. E.g. Google forked Blink from the WebKit engine so that they no longer had to think about compatibility with Apple. But Chromium/Blink is still open source and this is very good for Google. Aside from Firefox and Safari, all other browsers have switched to Blink, including Microsoft's Edge. This gives Google an insane amount of leverage. When Google implements a browser feature that makes the web more attractive, nearly all browsers benefit directly and Google's web-based services become even more attractive.
Of course Google's current level of influence also has drawbacks. E.g. they recently weakened the capabilities of ad-blocking addons (ostensibly for performance reasons, but Google is an ad company). This isn't always good for users. They are also so dominant that they don't have to stick to the web standards process but can just implement features directly – such proprietary extensions are reminiscent of Internet Explorer at the height of its popularity. But unlike IE they are still largely open source. Downstream browser makers can either take the features, or expend the effort of maintaining a forked version. Maintaining a diverging version is not really an economically viable option, thus being open source helps Google exert control over most competing browsers.
Google is broadly not in the business of selling copies of software. Google is in the business of offering Internet and Web services, most often accessed through a browser.
The overwhelming dominance of Chromium clones that you suggest in your question has already happened: Opera, Edge, and Chrome are all Chromium-based. Firefox and Safari are the only major holdouts not relying on Chromium. There could scarcely be better news for Google:
Any improvements made by Microsoft or Opera are usable by Google. The permissive license of Chromium means competitor are not required to share their changes, but it is generally a huge pain for downstream modifiers to keep patch-sets private and much easier to push them back the upstream project. Also, Microsoft and Google both realize they have much more to gain by open cooperation on a sidecar piece of software like a browser than doing the same duplicated work independently.
It is much easier for Google to maintain their web services, because they have fewer browser to support. If there were only one brand of browser in existence, Google could focus on a single version of their services, instead of one for each browser.
It is easier for Google to have their service require (or only be efficient on) Chromium-based browsers, the development of which Google can control directly or indirectly. They can afford to lose holdouts still using Firefox/Safari or (even better) convert them to Chromium users instead, because their need to use Google services outweighs their desire to use Firefox.
By making Chromium open source, Google succeeded in turning almost all competing browsers into rebranded copies of Chrome and getting to set all the baseline behavior/policy that would go into them. This would not have happened if it were not open source (either by virtue of not having source available, or not being licensed as open source, or both). It's not clear whether independently developed browsers would have continued to thrive or not in this alternate timeline, but even if not, it's likely that Google would have gotten the same kind of hatred Microsoft got for Internet Explorer back in the day when it was a thing; as it stands, they're instead getting prasie for destroying the competition and creating a browser monoculture.
To add to amon's very good answer:
Important trick for vendor is to force whatever the competitors are making into a commodity (Joel Spolsky called that "commoditize a products’ complements"). If your competitor's product is a commodity, the buy decision is made mostly on a price. And free is unbeatable price.
This is what Microsoft did with PC: make PC a commodity to run Windows software like Office (and in this way, destroying IBM PC business). And this is why IBM in return invested so much in Linux: to make server OS a commodity, and to make profit on services on top of it.
If Google makes the browser a commodity, provided for free, it can focus on harvesting personal info to sell more ads.