Rumor: Netease to Join Microsoft in MSN China JV
DoNews, 4/20/10
According to an informed source from the investment industry, Shanghai Alliance Investment, owner of 50% of Shanghai MSN Network Communications Technology, Microsoft's joint venture behind MSN China, has found a potential buyer for its share of the venture: Chinese internet company Netease (Nasdaq: NTES). Netease, which may assume Shanghai Alliance Investment's share of the company, would team with Microsoft to operate MSN China via the JV. A source close to Microsoft has said that the establishment of a JV with Netease to operate MSN China is nearly complete.
The above source said that rumors of Shanghai Alliance Investment's intent to withdraw from the JV had spread as early as 2007, since which Microsoft has been in talks with several major Chinese internet companies to form a replacement JV. Vincent Tao, formerly a senior executive at Microsoft Asia and currently CEO of P2P video streaming platform PPLive, said that Microsoft hopes to cooperate with a domestic internet company strong in both technology and platforms.
Microsoft has been in contact with Chinese internet companies including Baidu (Nasdaq: BIDU), Tencent (0700.HK), and Netease (Nasdaq: NTES) concerning establishment of a JV. An informed source said that prior to Google's departure from the Chinese market, Microsoft and Baidu were on very good terms, but that their competitive relationship has intensified following Google's withdrawal, and now chances of a JV between the two have grown slim. In addition, Microsoft and Tencent's competition over instant messaging has proved trying to Microsoft executives in their openness toward Tencent. Netease, in comparison, has both technical and platform resources, and Netease CEO William Ding, who himself comes from a technical background, has actively sought out a partnership with Microsoft.
Microsoft China has declined to comment on the matter.
Keywords: William Ding Netease Internet instant messaging Shanghai MSN Network Communications Technology Alliance Investment MSN China JV Microsoft NTES Vincent Tao
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