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January 19, 2006

Microsoft to invest $100 million annually in China

Posted by David Hunter at 9:00 AM ET.

Zhu Shenshen at the Shanghai Daily:

Microsoft Corp will invest more than US$100 million annually in the next three to five years in China to strengthen research and development, facing mounting pressure from expansion in the country by Internet giants Google and Yahoo!.

The software giant established a new research group yesterday in Beijing to integrate the Microsoft Research Asia Advanced Technology Center (ATC), the China Technology Center (CTC) and the MSN Technologies (China) into the new unit.

The investment will mainly be channeled into mobile communications, Internet and digital entertainment sectors. But a major portion of the funds will be used to recruit more talents, according to Yaqin Zhang, Microsoft’s vice president and the center’s president.

Microsoft planned to hire a total of 3,000 people in Microsoft China R&D Group Center by the end of 2008 compared with the current 800 employed.

The AFP rendition of this story mentions the ongoing criticism of Microsoft for helping the Chinese government stifle dissent. Microsoft continues to draw continued unfavorable press in that regard. Some recent examples are Business Week’s How China Controls the Internet and The Great Firewall of China and the Washington Post’s Business, and Repression, as Usual. There will undoubtedly be more when the planned Congressional hearings get started.

Update: Microsoft has issued a clarification:

Microsoft Corp said annual spending in China on research and development remained at 100 million dollars and no additional investment would be made as state press indicated earlier.

“Microsoft’s investment in all China related R and D activities currently stands at 100 million dollars per year,” Microsoft spokesman Mathieu Collette said in a statement.

Filed under General Business, Governmental Relations, Offshoring, Public Relations

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