Mozilla Takes on Microsoft in China

Internet Explorer has held a virtual monopoly on the mainland, home to 160 million Internet users. Now, Firefox is pushing for more market share

by Chi-Chu Tschang

Like most Chinese Internet users, Chengdu native Gang Lu for years used Microsoft's (MSFT) Internet Explorer for his Web browsing. He switched to Firefox, the open-source browser, six years ago only after going to Britain for graduate school and finding most of his friends and colleagues using it. Today, Lu is the London director of business development at Netvibes Asia, which offers personalized home pages, and spends much of his time working with Chinese Web startups. He says he's frustrated because so few Chinese sites support Firefox. "I have visited quite a few Internet companies and talked to their developers. More than 95% of these guys say: 'We just need to make sure our Web site or our service can work on IE. I don't care about Firefox.'"

Now, Firefox fans are trying to boost the upstart browser's Chinese profile. Last month, Mozilla signed an agreement with China's most popular search engine, Baidu (BIDU), to cement an existing relationship that allows users of Firefox's Chinese edition to use Baidu's search engine. That was the latest in a series of China developments. In July the Mozilla Foundation, the open-source group that promotes Firefox, formally set up a presence in Beijing to spread the gospel of the open-source movement and convert as many Chinese Internet users to Firefox as it can.

Mozilla also hired Li Gong—formerly general manager of Microsoft's MSN operations in China—and named him chairman and chief executive officer of Mozilla Online, the nonprofit foundation's first legally owned entity outside the U.S. And it has opened an office in Beijing's Tsinghua Science Park, where Google (GOOG), Sun Microsystems (SUNW), and Chinese portal Sohu (SOHU) have offices.

160 Million Internet Users

One item at the top of the agenda to popularize Mozilla: Come up with a Chinese name. Because "Mozilla" is a made-up word that cannot be translated into Chinese, the Mozilla team named the Beijing subsidiary "mou zhi," meaning "seeking wisdom" in Mandarin. "Through promotion of Firefox, we want to promote a vision that the Internet should be open, people should have choice, people should be able to personalize their experience, not [let it be] dictated by one company," says Gong, who served as co-chair of Mozilla's foundation in China while he ran Sun's China operations in 2005.

Firefox still has a long way to go. With more than 160 million Internet users, China is the world's second-largest Net market and is likely to overtake the U.S. as No. 1 by the end of the decade. More than four-fifths of China's Internet users use IE to go online, mostly because it's bundled with the Windows operating system. Homegrown companies Maxthon—a private company based in Hong Kong—and Tencent —the Shenzhen-based operator of China's most popular instant messaging service—both have browsers based on IE kernels that are the second and third most commonly used in China.

Mozilla estimates there are 3.5 million regular Firefox users in China, giving it just 2% of the market. (According to June, 2007, figures by Onestat, Mozilla has a 19.65% market share in the U.S.) Mozilla has set a goal of grabbing a 5% market share in China "as quickly as possible," says Gong.

A Matter of Security

In the West, Mozilla has been able to eat away at IE's market share by promoting Firefox as a free open-source software project. In China, the open-source movement is having a harder time gaining traction because of widespread software piracy. With pirated copies of Windows XP or Vista selling on the street for less than $2, there is little economic incentive for Chinese Internet users to download Firefox.