Google Chrome has announced that it will be blocking local installation of extensions, and only extensions installed through the Chrome Web Store  will work. These changes will take effect in January 2014. This move by Google follows several security threats by malicious extensions, definitely such extensions cannot be allowed on the Chrome Store, so developers have found other means to distribute them, this will improve security of the browser and its users. Totally rejecting installation of ‘external’ Chrome extensions will offer more security as compared to previous measures such as warnings, disabling extensions and preventing auto-installation of extensions. Google says that some of the extensions change the browser settings mainly security settings and hence ruining the true browser experience on Chrome. Developers will still be able to make local extension installations, however they are required to pay a fee of $5 and follow Google’s guidelines and terms & conditions so as to publish their extensions on the Chrome store. You might thinl this move is brilliant but some extensions that we love do not follow Google’s terms & conditions hence they do not exist on the chrome store e.g. YouTube & Playstore apk downloaders, and some extensions from developers who are not willing to pay $5 will definitely be missed. So ask yourself one question, what is more important than security? Then choose to frown or smile to Google’s changes

Since these malicious extensions are not hosted on the Chrome Web Store, it’s difficult to limit the damage they can cause to our users. As part of our continuing security efforts, we’re announcing a stronger measure to protect Windows users: starting in January on the Windows stable and beta channels, we’ll require all extensions to be hosted in the Chrome Web Store. We’ll continue to support local extension installs during development as well as installs via Enterprise policy, and Chrome Apps will also continue to be supported normally.

Source: GoogleChromium Blog