China gets MSN portal

BEIJING - Software giant Microsoft Corp has launched MSN China, a Chinese-language Web portal with content provided by Chinese partners, to tap deeper into the world's second-largest internet market.

The portal will be run through Shanghai MSN Network Communications Ltd., a joint venture Microsoft established on May 11 with government-operated Chinese firm Shanghai Alliance Investment Ltd.

Microsoft has said the portal will offer far more communication, information and content than available through the MSN services, such as Hotmail and Messenger, it already runs in China. Messenger, an instant messaging platform, is especially popular and has around seven million users in the country.

"Relative to the broad user base, mobile user base and internet user base, the instant messaging market is still under-developed. We think that is an opportunity to explode," Michael Rawding, Microsoft corporate vice president of MSN global sales and marketing, said.

"We expect to get similar kind of usage of the portal site," Rawding said on the sidelines of a news conference on Thursday in Beijing, without providing financial forecasts or specific user number predictions for MSN China.

China has about 100 million internet users and the number is growing.

"We know we haven't reached saturation in terms of new users coming online and new mobile users. And as their affluence level also rises, their expectations on what they want to get done on the internet becomes more and more meaty," Rawding said.

On May 11, Microsoft also said it would buy assets from Chinese mobile phone software provider TSSX to offer MSN-based services to China's 340 million mobile phone users.

Major foreign players such as Yahoo and Google have already opened Chinese sites and established positions in the market through a string of acquisitions.

Microsoft's late entry, coupled with its strategy of working with relatively unknown partners, meant it could face a tough time gaining traction, an analyst said.

The software giant has long seen China as a key growth market, but also a headache because of widespread software piracy and copyright issues.

Censorship has also been a major problem for many internet players, who voluntarily block searches and other links to sensitive subjects like the Falun Gong religious movement and the 1989 crackdown on pro-democracy protesters in Tiananmen Square.

- REUTERS