Last week, Google stirred up controversy with a low-key announcement: in the near future, it would drop support for a widely used video format in its Chrome Web browser. Here’s a primer on what Google is doing, why it’s doing it, and how it will affect you.

What exactly did Google do?

Last Tuesday, the company announced on the blog for its Chrome Web browser that it plans to discontinue built-in support for the H.264 video format, which is used by many Web publishers. Google said that instead, it would adopt the free-to-use WebM, a multimedia format that Google has largely developed and funded itself.

How will this affect you?

It probably won’t, unless you’re one of the roughly one in 10 people who use the Chrome browser. Even then, you might not notice. What’ll happen is that video clips embedded in Web pages using the new HTML <video> tag—part of the emerging HTML5 standard—won’t play if they’re encoded in H.264.

Today, most Web video is served not via a <video> tag, but through Adobe’s Flash player, which Google bundles with Chrome. So most video sites won’t look any different. It’s also possible to serve H.264 video using Flash.

Google has announced forthcoming WebM plug-ins for Microsoft’s Internet Explorer and Apple’s Safari. It’s a given that Firefox will also play WebM videos. Several major chipmakers, including AMD, ARM, and Broadcom, have pledged to support the format, as has Adobe for its Flash player. But without WebM being available by default in Internet Explorer, one Microsoft evangelist likened Google’s move to throwing its weight behind Esperanto. In response, Google has pledged to supply browser plug-ins for Internet Explorer and Safari that will enable them to automatically play WebM video.

Eventually, engineers could build downloadable add-ons for Chrome that would enable it to play H.264, circumventing Google’s move altogether. So for now, Google’s move won’t have much of an effect. And importantly, if you have a Google-powered Android phone, nothing will change on your device.

Unlike Apple’s refusal to support Flash players on its iPhones and iPads, Google’s removal of H.264 support from Chrome will be much less high-profile. Google’s massive YouTube site will still stream video in H.264 (except for users who click a button to opt to use WebM). “That Chrome has dropped H.264 is less important than YouTube [dropping it],” notes Informa analyst Andrew Ladbrook.

In that case, why is Google doing this?

The H.264 format is commercially licensed by an organization called MPEG LA. Companies that make video software and hardware pay license fees to MPEG LA in order to build H.264 support into their products.

Google’s stated aim is to shift Web video away from H.264 and toward WebM, in order to drive the Internet toward a royalty-free standard over which Google would have a large influence.

Interestingly, MPEG LA’s members include Microsoft and Apple, which are pushing for H.264 to be used as the standard format for the <video> tag in HTML5. “Microsoft had announced that it was firmly backing HTML5 and H.264 as the codec of choice for the <video> element,” says Ladbrook.

There’s already another royalty-free video format, Ogg Theora, supported by Mozilla’s Firefox and other browser makers. But Microsoft and Apple have refused to build in support for it, and so far have not announced support for WebM. And Steve Jobs has written that he’s concerned that Ogg Theora will invite patent lawsuits from other companies, which would undermine the point of using it.

So some observers think Google’s move is a swipe at Apple, H.264’s most high-profile supporter and holder of some of the patents licensed through MPEG LA. Google and Apple had been close allies in the past, with Google CEO Eric Schmidt serving on Apple’s board of directors. But in 2009, Schmidt resigned from Apple’s board, and relations between the two companies have grown increasingly frosty, especially now that Android phones are neck and neck with Apple’s iPhones among smart phone buyers.

Why are some people so angry at Google?

The worst crime among tech people is inconsistency. Google claims it is removing support for H.264 from Chrome to support open (read: royalty-free) standards for the Internet. But if that’s true, critics say, why doesn’t Google also remove the Flash player, a much more widely used, and equally proprietary, format that Apple has stridently refused to allow on its iPhones and iPads? Besides the licensing issue, Flash players are said to slow down mobile devices and drain their batteries compared to embedded videos.

Many suspect that Google is simply using Chrome to nudge Web publishers away from H.264 and toward WebM without disrupting access to any content on Android-powered phones (which now outsell Apple’s iPhones by some estimates). Chrome users, who were already tech-savvy enough to install an alternative browser, can switch back to their computer’s default browser to play H.264 videos. An Android phone owner would need to install a second browser.

How will this play out?

It’s not certain. For now, only some Chrome users will notice a difference in how their browsers work on Web pages with video, and only on those pages that use the <video> tag, which are a minority. In the long run, however, Google’s move may prompt Microsoft and Apple to reluctantly add support for WebM. If that happens, video publishers, starting with the large ones who pay license fees to MPEG LA, may have the financial incentive to serve WebM video alongside H.264 until the vast majority of Internet users have browsers that can play WebM clips.

For now, though, Web publishers will have to separately encode and serve WebM clips alongside their existing clips, which are largely encoded in H.264. But that doesn’t make financial sense. Unless Microsoft and Apple buy in, Chrome becomes more widely used, or Google removes H.264 support from its Android phones and stops streaming its YouTube clips in the format, there’s no compelling reason yet for anyone to make the switch to WebM. It’s easier and cheaper to wrap H.264 video in Flash—the opposite of Google’s stated goal. As one journalist, MG Siegler of TechCrunch, concluded, instead of spurring adoption of its royalty-free format, “Google is handing the keys of Web video’s future right back to Flash.”