Microsoft to establish its R&D center in Shanghai

February 1, 2007

Microsoft Corp. is establishing, in Shanghai, China, a center for research and development. The center will work on the company's MSN service. It will be Microsoft's first research and development center of this kind outside the U.S.

Microsoft decided to take this step because of several setbacks that occurred in its online services working in China. One of the company's setbacks concerns the resignation of Luo Chuan, who was Microsoft's top executive responsible for the Chinese Windows Live unit.

The company's new research and development center is to be established in Shanghai's Zizhu Science Park. At this location, where another giant, Intel Corp, already has its research office, Microsoft plans to develop Internet software.

The center is estimated to cost $ 20 million. It will have a special technical support team that will work on Microsoft's MSN Messenger. The company hopes to make its online communication tool popular among Chinese teenagers and young professionals.

Microsoft already has an R&D center in Beijing. However, the software giant lacks a facility to work with its well-known MSN service. Investing in its communication tool may strengthen the company's leading position on the Chinese market.

Setting up the MSN research and development center in Peoples Republic of China implies that Microsoft looks forward to taking advantage of the Chinese market, which represents a quite flexible environment. This statement was made by Doug Crets, who works at Media Partners Asia as a Hong-Kong-based analyst.