Global Economics

Maxthon: China's Hit Browser


Maxthon, a browser made by a tiny Beijing company of the same

name, has attracted millions of users in China for functionality that can funnel

traffic through a Web proxy and circumvent government controls on information in

search engines like Google, Yahoo, MSN, Baidu.com and other popular sites or

Internet service providers in that country.

From China, the browser has caught on in Europe, and now somewhat in the

United States thanks to an appearance with Microsoft at the Consumer

Electronics Show in Las Vegas earlier this year--though it is still largely

unknown stateside. So far, about 60 million people have downloaded the browser

since its launch in 2003. According to Maxthon research, about 14 percent of the

Chinese Web population has used the browser and 17 percent employs it for Web

search.

"It's exploding there," said Netanel Jacobsson, a Maxthon senior vice

president and partner who's based in Israel.

Of course, Maxthon does not promote the proxy feature openly--it is merely a

shortcut that has spread virally among Chinese Web surfers. People who download

the browser must be fairly technically savvy to activate it, but according to

Jacobsson, various bulletin boards in Chinese instruct people how to do it.

"The capability is there for people who know," Jacobsson said in a recent

interview with CNET News.com.

In fact, Maxthon executives and investors downplay the feature for obvious

reasons. Web

censorship in China has become a hot-button issue as U.S companies such as

Google, Yahoo and Microsoft have entered the market and complied with the

communist regime's standards to restrict thousands of Web sites from public

access. Yahoo has even turned over information on dissidents to the Chinese

government. The search giants' practices in the country have come under fire by

everyone from free-speech advocates to the

U.S. government.

Still, Maxthon has a grassroots following for other reasons. It includes

filters to zap all Web ads, including pop-ups--a valuable feature for the

typically cluttered environments of Chinese Web pages. It is highly customizable

with hundreds of "skins," and it includes tabbed browsing, baked-in RSS

detection and readers, and remote-file access in partnership with software

company Avvenu. It also has a development platform for plug-ins that inspires

hundreds of techies to create add-ons for the browser.

MAXTHON GAINING FANS FAST. This summer, Maxthon will release a new

version, Maxthon 2.0, that will include parallel browsing, similar to the

picture-in-picture feature on TVs, in which surfers can browse several sites in

parallel. They'll also be able to copy and paste text from one page to another

without switching screens. The future of Maxthon is allowing people to customize

it into their own information portal, Jacobsson said.

Maxthon's millions of fans and rising popularity point to the fact--yet

again--that innovation in the Web browser market is not dead, nor is it ignored,

despite a seeming end long ago to the browser wars, said analysts.

Though Microsoft's Internet Explorer has close to 60 percent share in the

United States browser market, according to Forrester Research, and as much as 85

percent globally, according to various estimates, there's still plenty of fight

left in the browser market.

As Michael Gartenberg, a veteran browser analyst and vice president of

research at Jupiter Media, put it: "It's the most important space that no one

really cares about."

In the last year, Firefox, Netscape's legacy, made inroads on IE's dominance,

drawing more than 130 million downloads in less than two years. Opera,

Netscape, Flock and Apple Computer's Safari have lured strong followings of

their own, but none enough to overthrow IE. Firefox's threat and popularity has

spurred a recommitment from Microsoft, however, with its introduction of IE

7.

"The browser wars continue, yet these days they're more border skirmishes

than global conflict because there's just no money to be made selling the

browser," Gartenberg said.

Some tech investors say people shouldn't forget that the browser is

fundamental to the future of the Internet, giving people better access to

information on the Web and the desktop if done right.

"The advent of broadband, and technologies like AJAX and RSS are redefining

the role of the browser from a dumb reader to a single point of customization

for users," said William Tai, a venture capitalist with Charles River Ventures

and an investor in Maxthon.

"The first click is the browser, it's the instrument panel to the Web," he

added.

Still, most of the money to be made on Web browsers today is through search

advertisements. Firefox, for example, makes money on fees from search ads from

Google, which is its default search engine.

Within China, Maxthon's default search function is served by Baidu, one of

the biggest services in that country. Outside of China, Yahoo and Ask.com power

its search features.

Maxthon turned a profit beginning in 2004. Roughly 80 percent of its revenue

comes from search-related ads, collected from partners.

Despite not seeking funding, the company took on an investor, Charles River

Ventures, in recent months. That deal was largely because of great interest on

the part of Tai, according to both Tai and Jacobsson. The investment adds to

early funding from Morten Lund, a seed investor in Skype. The company plans to

use venture funding to add to its development team of about 15 in Beijing.

Still, a plus and minus for Maxthon is its rendering engine, which is

actually Internet Explorer. Maxthon is built on top of the IE engine, removing

it from direct competition with the software giant. Executives say that lets it

add value to the browser through features like tabbed and parallel browsing. But

that can be a double-edged sword, too, turning off people who dislike

Microsoft.

"We make them look good," he said. He added that Maxthon has tweaked IE to

make it faster, and people can choose to render Maxthon with Gecko, Mozilla's

original underlying engine.

"Browsers are very much like a car," said Jacobsson. "Most people don't care

what engine is inside, (they) choose which type fits, with the right shape and

color."


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