Page 167 - How China Is Winning the Tech Race

Internet Explorer. “I’m still using Maxthon out of dogged loyalty,” says Kuo,
now group director for digital strategy at Ogilvy China. “Truth is, if you set
up Firefox right, you can do most of what Maxthon does.”
Little more than five years ago Chen got by on $2 to $5 contributions
from the PayPal account he set up. By 2004, the amounts grew to hundreds
of thousands of dollars. Chen quit his day job and began devoting all but his
sleeping and eating hours to the project.
After raising his first big bucks in 2005, Chen set up shop in his investor’s
office and hired a few techies to do more tests of the software. Soon, with 15
employees, he leased space on the outskirts of Beijing, where the air quality
was better and the surroundings more peaceful. It wasn’t long before Chen’s
team perfected the browser, tellingly called MyIE2, a reference to the
Microsoft browser. Chen later changed the name to Maxthon to avoid con-
fusion with Internet Explorer.
In effect, Maxthon is both a partner of and an indirect competitor of
Internet Explorer. Because Maxthon has been developed with support from
the open source community, Microsoft can gauge what features are most
popular and then pick them up to use in Internet Explorer. The latest version
of Internet Explorer, released in 2006, incorporates several features originally
offered by Maxthon.
Donations from developers and venture capital still help with many of
Maxthon’s expenses. The $1 million strategic deal with Google China could
bring in additional revenues from paid searches directed from the Chinese
browser to the American search engine. Maxthon has begun to feed online
searches to Google in China, making a switch from Google’s China rival
Baidu. In return, Maxthon is working with Google to increase its presence in
the United States, though the business details were not disclosed to me.
Other potential revenue sources are distribution partnerships with
Amazon and eBay. For a fee, Maxthon would display its services on the
browser and then share sales revenue. More ideas include building out the
browser with e-mail, calendars, contact lists, and interactive services that can
be supported by advertising. “We want to monetize the service, but we don’t
want to make it too commercial,” says Chen.
At some point soon, the Maxthon team will have to evolve the business
plan. No one would blame the team for being tempted by a takeover offer
from Google. After all, Google bought the then-unprofitable YouTube video

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