Microsoft China Venture Partnes with Sina

Microsoft has joined forces with Sina, China's largest online news portal and leading microblogging site, in a deal that could help MSN grow into a sizable player in the country's internet industry.

MSN China, a joint venture which runs the instant messaging service in the country, and Sina on Thursday started linking their instant messaging tools and blogging sites.

Users of Sina's microblog, Weibo, can have their messages displayed on their Windows Live Messenger accounts and log on to Weibo with their MSN account names. Bloggers on the Windows Lives Spaces platform can also move to Sina's equivalent blogging site.

The alliance could bring additional users to MSN. China had 858m active instant messaging accounts in the third quarter, according to Analysys, the internet research firm. MSN ranks second in this market after QQ, the instant messaging platform run by Tencent which has more than 600m active accounts.

More importantly, the tie-up could help both companies increase the revenues they generate per user. It also marks a more decisive step towards open platforms - which allow users to move between different companies' websites.

"The US has been moving towards open platforms for five or six years but China hasn't," said Xie Wen, a former head of Yahoo China and prominent internet industry expert. "One should realise that the dividend from the Chinese netizen population has been almost used up, and we have now entered the era of cross-selling."

"If Sina is serious about this and moves fast enough, they could create significant pressure on QQ, Sohu and Netease," said Mr Xie.

Sohu and Netease are two other large Chinese online portals. Sohu has a focus on news and blogging services, while Netease concentrates on online games.

The tie-up comes after QQ issued an ultimatum to users last week to drop a rival antivirus software from their computers or be denied QQ logon, which has upset their users. Qihoo 360, which makes the antivirus software, and QQ began started toning down their public spat this week following criticism from the government .

"You can say that this co-operation between MSN and Sina shows the butterfly effect from the fight between QQ and Qihoo 360," said Liu Xingliang, head of Hongmai, the internet software company.

Tencent is known as the Microsoft of China and has successfully rolled out a stream of new products and services to generate new revenue from its huge user base. QQ users can do everything from playing online games and social networking to shopping online and reading the news without leaving Tencent's platform.

Liu Zhenyu, president of MSN China, said the company hoped to create an aggregation platform through more co-operation with local partners.

Renren, China's largest social networking site which resembles Facebook, also said it would increase open platform functions.

"In the future, the role of the aggregator will increasingly be played by social networking sites and not by search engines," said Huang Jing, a director at Renren.

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