Microsoft Corp.’s MSN unit is treating its greater China market as a geographically separate region, industry sources said on Tuesday, in a nod to China’s increasing importance to the software giant.
MSN’s greater China region — which includes mainland China, Taiwan and Hong Kong — now reports directly to U.S. headquarters rather than as part of the Asia-Pacific region, industry sources close to MSN China said.
Microsoft online services group spokesman Richard Feng on Tuesday confirmed the shift.
“It’s because of the importance of the greater China market, because of the potential, its growth and business value,” Beijing-based Feng said by telephone.
Microsoft is bumping up its online media offerings to consolidate its leading position and compete against foreign rivals in China, the world’s second-largest Internet market after the United States with around 137 million Web users.
MSN China plans to launch a job search service in China this year, it said earlier this month, in a move which potentially brings it up against giants 51job Inc., ChinaHR.com, controlled by Monster Worldwide Inc., and Zhaopin.com.
Sources also told Reuters last month that Microsoft was setting up a research and development center in Shanghai for MSN, its first such center outside the United States.
MSN’s R&D center, based in Shanghai’s Zizhu Science Park, where chip giant Intel Corp. already has a research office, will develop Internet software. Intel also said recently that it would treat mainland China and Hong Kong as a geographically separate region from fiscal 2007.
MSN China is also partnering with China’s largest online travel agent Ctrip.com to target the country’s growing ranks of affluent young consumers looking to travel.
And Microsoft’s online communication tool, MSN Messenger, is already part of everyday life for teenagers and young professionals in China, with over 20 million users there.
The moves came despite Microsoft’s personnel 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.
Meanwhile, sources have said that Rupert Murdoch’s News Corp. is finalizing a deal with partners, including private equity heavyweight IDG, to launch a networking Web site venture in China within a few months.
MSN’s China site is a 50-50 joint venture between software giant Microsoft and Shanghai Alliance Investment, a major city investment firm run by Jiang Mianheng, the son of former Chinese President Jiang Zemin.
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