Friday, June 23, 2006

Internet Censorship is Dealt Another Blow

Stefanie Olsen, CNET News:
Web surfers in China frustrated by censorship in search engines are increasingly turning to a little-known Internet browser with a big following in the Middle Kingdom.

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, and other popular sites or Internet service providers in that country. READ MORE

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's 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 through Baidu, one of the largest search services in that country.

"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's 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

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's 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 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."