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31 January 2007
Microsoft
sets up MSN R&D centre in China-sources
By Sophie Taylor
Reuters News
(c) 2007 Reuters Limited
SHANGHAI, Jan 31 (Reuters) - Software
giant Microsoft Corp. is setting up a research and development
centre in Shanghai for its online MSN service, its first
such centre outside the United States, sources familiar
with the plan said on Wednesday.
The move came after
Microsoft saw setbacks in its online services in China,
including the resignation of a top executive responsible
for the company’s Windows Live unit in China late last
year.
“It’s a clear
signal that Microsoft won’t give up its online MSN service
in China even though it may have some problems in its
local operations,” one source, who declined to
be identified told Reuters.
“Twenty million
dollar is really small money to Bill Gates, but it’s
important to notice that Microsoft has chosen Shanghai
for its first overseas MSN R&D centre,” the source
added. .
The R&D centre,
based in Shanghai’s Zizhu Science Park, where chip giant
Intel Corp. already has a research office, will develop
Internet software, the sources said.
The centre, which will
cost up to $20 million, will also have a technical support
team for Microsoft’s online communication tool MSN Messenger,
which has become part of everyday life for teenagers
and young professionals in China.
MSN Messenger has over
20 million users in China, the world’s second-largest
Web market with around 137 million users.
Microsoft could not
immediately be reached for comment.
The plan to set up a
MSN R&D centre in China also indicates that the company
is keen to take advantage of the relatively flexible
working environment and large pool of engineering talent,
said Doug Crets, Hong Kong-based analyst at
Media Partners Asia.
“We’re seeing things
being done in China that are often squelched or squandered
in the U.S. or other western countries,” said Crets,
referring to China’s relatively lax attitude towards
intellectual property, which may allow for more experimental
technology and business ventures.
“It’s like going
back to the old fashioned ‘tinkering with the Web’ feeling
here,” he added.
LOGON TO CHINA
The investment by Microsoft,
which set up a research and development centre in Beijing
in 1995 but as yet no R&D facility for the popular
chat service MSN, may help to consolidate its leading
position in China where global players are also hunting
for profits.
For example, industry
sources told Reuters last week that Rupert Murdoch’s
News Corp. is finalising a deal with partners, including
private equity heavyweight IDG, to launch a networking
Web site venture in China within a few months.
Luo Chuan, former head
of Microsoft’s Windows Live unit in China and also responsible
for the China site of the company*#8217;s MSN portal, resigned
from Microsoft at the end of 2006.
Now, Luo is tipped to
become the first chief executive for MySpace China,
an online networking Web site similar to MSN.
“The MSN R&D centre in Shanghai is also part of Microsoft’s efforts to become localised,” said the first technology source.
The source said MSN
China is also partnering with Shanghai Media Group,
one of the country’s biggest media companies, on online
video and shopping business and the new MSN R&D
centre may develop software to provide technical support
to the partnership. (Additional reporting by George
Chen and David Lin)
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