US software behemoth Microsoft made its first acquisition in China and
brought its MSN formally into the country, in a push to accelerate its
entry into the local Chinese market.
Microsoft said yesterday that its MSN unit had formed a joint venture
Shanghai MSN Network Communications Technology Co Ltd with Shanghai
Alliance Investment Ltd (SAIL).
Chuan Luo, MSN regional director for China, said the joint venture will
be a 50-50 entity between the two companies, but declined to reveal the
investment volume of the firm.
SAIL is owned by the Shanghai municipal government and is also the
partner of Microsoft's first software service joint venture in China in
2002.
Luo said that although China is the 41st market that MSN has entered,
it will become an important part of MSN's global operations.
Currently, MSN provides free Hotmail e-mail and MSN Messenger services,
but with the formal launch of MSN, Luo said his firm will provide much
richer services including portal, MSN Messenger, Hotmail, wireless
value-added services, and a search service.
Luo said MSN China expects to mainly generate revenue through online
advertising and wireless value-added services.
Microsoft also made its first acquisition in China, buying research and
development assets from TSSX Mobile, a mobile software developer in
Shenzhen, a special economic zone in South China's Guangdong Province.
"We are committed to growing our MSN business globally and this is a
great opportunity for us to work with TSSX, which is very valuable to
Microsoft," said Chuck Friedman, general manager of MSN Mobile.
The technological resources of TSSX will be integrated into MSN China
Mobile Development Centre.
Friedman said he believes China, with its huge success in mobile
communications and related value-added services, will provide good
experience for MSN's development in other parts of the world.
MSN China's Luo said his business had already won a value-added telecom
service licence from the Ministry of Information Industry and is talking
with Chinese mobile operators for a license to conduct mobile value-added
services.
The acquisition also marks a speeding up of the the US giant's entry
into China.
"In addition to delivering MSN services to meet local customers' needs
and interests, we are working closely with local companies as part of our
ongoing commitments to contributing to the growth of the local technology
industry in China," said Tim Chen, vice-president of Microsoft and CEO of
its China operations.
The acquisition will add some weight to Microsoft's increasing
localization, after it formed two joint ventures and built the most
complete development system outside its headquarters in the United States.
The Chinese Government has been encouraging foreign software companies
to engage in more co-operation with the local industry. It does not only
regulate the market, but also is the biggest potential customer of
companies like Microsoft, as all government agencies are required to use
legal software.
Zhang Qi, a senior official in charge of the software industry with
Ministry of Information Industry, said on Tuesday that although Microsoft
had failed to deliver on its commitments in the past, it had done very
well in 2004.
In the past year the company trained almost 100 chief information
officers at State-owned enterprises in Northeastern China to help them
deploy information systems.
Zhang said Microsoft also delivered its promise to train 300 CEOs of
Chinese software companies last year.
(China Daily) |