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TechCrunch has broken the story that Google has bought a $1 million dollar stake in the Chinese/Israeli owned Maxthon browser.

The move could represent a significant drop in traffic for Baidu, which is currently the largest search engine in China in terms of market share and Google’s primary competition within the country.

According to some report, Maxthon could account for as much as 25% of Baidu’s overall traffic.

If that’s the case, then the purchase will represent a huge shot in the arm for Google, who no doubt will demand that it be incorporated as the default search engine for the browser.

TechCrunch’s Michael Arrington breaks down the deal:

At the very least we expect the strategic deal to involve replacing the default search option in the browser from the Baidu search engine in China and Yahoo in other countries with Google search. The deal may also go beyond search and involve integration with other Google services directly into the browser. Maxthon would then be promoted on Google as a preferred browser.

Maxthon is based off of the IE rendering engine, which could create some potential conflict in light of Google’s past contributions to the Firefox browser.

Is the company looking to form a new alliance with IE-based browsers, or are they just looking to dip into as many cookie jars as possible?

ZDNet’s Mary Jo Foley ponders the question:

Given Google's close partnership with Mozilla, would a Google-backed Maxthon dump the IE engine in favor of Gecko, the rendering engine at the heart of Mozilla? Or would Google be more likely to push for Maxthon to remain IE-based, giving Google a stronger foothold in the IE browser marketplace?

There seem to be more questions than answers on the heels of this announcement. Google has made no official statement concerning the acquisition as of yet, so it will be interesting to see if the company unveils any of its initial plans for the browser at that time.