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MSN China shoots for e-retail push to grow business

Bing and Windows Phone Marketplace tie-up on the cards

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Microsoft is reportedly set to expand its MSN China business, with a push into the e-commerce space and increased integration with Windows Phone, whilst looking to grow the presence of its Bing search engine in the People’s Republic.

Bejing-based consultancy Marbridge Consulting brought the news to the masses courtesy of its translation of a Sina Tech article.

Although short on detail, it reported MSN China’s general manager Liu Zhenyu as confirming that the business would look to grow its revenue and 50-60m active users via advertising, paid services, and e-commerce.

Giving away another hint as to where the first of these streams would be focused, Liu reportedly said that MSN China has already developed an advertising system for Bing search, which is apparently now officially out of beta.

Search was also mentioned as a key differentiator for MSN’s planned push into e-commerce, a market which China hopes will lead the world by 2015 with sales reaching 18 trillion yuan (£1.4tr).

It’s unclear whether Microsoft is aiming to go it alone with Bing eventually, despite the limited success it has had in an on-going partnership with domestic market leader Baidu centred around English language searches.

Despite pulling its search servers from the country in 2010 after a high profile dispute, Google still has around 17 per cent of the market and it would requires significant investment from Microsoft to produce a serious Chinese language search engine to challenge the market leaders.

Gartner analyst Praveen Sengar told The Reg that China represents a big opportunity for MSN but that it must partner with domestic firms to achieve success.

"Search is still very critical in driving traffic to e-commerce sites. Although Google dominates in the West, in China it is all local players," he added.

"If you want to do e-commerce well in China you need to work with the local search engines and social players."

Liu reportedly also explained that Microsoft would look to integrate further with Windows Phone by taking over responsibility for the platform’s app store, Windows Phone Marketplace, in China.

Microsoft’s COO for Greater China, Michael van der Bel, recently claimed in an interview with Dutch title Emerce that its platform had already reached a market share of seven per cent in the People’s Republic, although Redmond has since refused to confirm the figures.

Whatever the stats, Windows Phone still represents a decent opportunity for Microsoft to capitalise on BYOD trends and the huge and growing smartphone market in the People’s Republic.

In response to a request for comment, Microsoft China would only say that it currently has three sources of income: display ads from the MSN portal and Windows Live services; Bing search engine ad revenue including that from adCenter and MSN M+; and assisting with management of mobile internet products including Windows Phone Marketplace. ®

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