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September 22, 2006

Windows Live Search goes to China

Posted by David Hunter at 3:00 PM ET.

Besides investing in search technology, Microsoft is growing its search customer base directly by signing up partners like Nokia and now China Telecom:

Microsoft will provide China Telecom, the nation’s biggest Internet service provider, with a Web search service to try to raise the carrier’s share of the Chinese Web market, the companies said Tuesday.

Microsoft will provide its Live Search service to China Telecom’s 25 million broadband customers and more than 80 million Internet users, the two companies said at a briefing in Beijing.

The agreement will allow Microsoft to tap into “China Telecom’s strong broadband subscription base,” said Jenny Szeto, an analyst at Daiwa Institute of Research. Szeto has an “outperform” rating on China Telecom’s stock.

Microsoft is working with China Telecom to raise its share of the Internet market in China, whose users are expected to double in five years, according to the market researcher IResearch. The world’s biggest software maker has invested hundreds of millions of dollars on its search engine to lure customers away from Google. Microsoft trails, Google and Yahoo! in China.

Windows Live Search just launched on September 11 and already the Live logo is on the China Telecom portal home page. I expect it doesn’t hurt that they are using Microsoft web servers.

Update 9/24: LiveSide’s Kip Kniskern points to a Xinhua news service report that has some further details:

Before entering into the agreement with Microsoft, China Telecom terminated its cooperation with Yahoo! in search services in August.

China Telecom has also instructed its provincial branches and portals to adopt Microsoft technologies and terminate cooperation with other search engines.

Earlier media reports said the cooperation would last till 2008,and that China Telecom would share revenues of the search engine service with Microsoft on a 70-30 split in 2007 and 50-50 in 2008.

In addition, Microsoft will pay 21 million U.S. dollars to China Telecom as a base income.

Both parties declined to confirm the report.

Filed under Alliances, Live Search, Microsoft, Windows Live

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2 Responses to “Windows Live Search goes to China”

  1. A tale of Baidu, MSN China, and Windows Live Search -- Microsoft News Tracker Says:

    [...] I’m a little puzzled about the China Telecom claim, since Microsoft signed a Windows Live Search deal with them in September, but here’s the really interesting part:  [...]

  2. Microsoft Weekly Miscellany, April 27, 2007 -- Microsoft News Tracker Says:

    [...] China Telecom gives Google Web advertising rights. Microsoft had earlier done a search deal with China Telecom, but doesn’t seem to be in any position to provide Chinese ads, since they have farmed their own out to Baidu. [...]

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