Microsoft’s Tricky Castle in China, Marketing & Advertising News, ET BrandEquity

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Windows, Gates and a firewall: Microsoft’s delicate castle in China.

Microsoft, which will shut down its professional social network LinkedIn in China, is one of the few American tech titans to have achieved some success in the country.

The software giant has maintained its business in China largely by complying with strict local laws, despite widespread censorship from the communist nation.

Here are some key points about the tech and games group’s operations in the world’s second-largest economy.

A pioneer

Microsoft arrived in China in 1992 and opened its largest research and development center outside of the United States. It employs around 6,200 people in China.

The Windows operating system is used in the vast majority of computers in China, although Beijing has promised in recent years to develop its own operating system. The company’s success has a downside, however, as its software is heavily pirated.

The large Chinese market, which is very restrictive for foreign companies, represents a drop in the ocean of Microsoft’s business, accounting for just 1.8% of its revenue, President Brad Smith said at the start of the report. last year.

Microsoft’s Bing is one of the few foreign search engines operating in China, although it lags far behind local competitors Baidu and Sogou, which dominate the market.

Bill Gates

Microsoft founder Bill Gates has long been a role model for many Chinese people, and his books are bestsellers in the country.

President Xi Jinping visited the company’s headquarters during a state visit to the United States in 2015, where he met Gates and his wife.

Microsoft is not leaving China entirely, as the company said its new strategy would focus “on helping China-based professionals find jobs in China and Chinese companies find quality candidates.”

Today, as head of his Bill & Melinda Gates humanitarian foundation, the 65-year-old has the prestige of a head of state in Beijing. In February 2020, Xi wrote a letter thanking Gates for his support during the coronavirus outbreak.

Censorship and control

China censors all matters deemed politically sensitive in the name of stability, and internet giants are urged to block unwanted content online.

Refusing to comply with the strict demands of Beijing, the American giants Facebook, Twitter, Instagram and YouTube, as well as Wikipedia and several other foreign media, are blocked by the Chinese “great firewall”.

Things have not been smooth for the company, with Bing being temporarily taken offline in 2019 – suggesting the search engine may have been blocked by censorship.

Microsoft has operated its professional LinkedIn network in the country for years by complying with censorship rules through a local joint venture.

But on Thursday, he announced he would shut down LinkedIn in China, citing an “increasingly difficult operating environment and stricter compliance requirements.”

In March, the group previously announced it had halted new member registrations while reviewing compliance with local laws.

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LinkedIn has come under fire in the country for extracting professional accounts of dissidents – which it later said was a mistake – and for removing politically sensitive content from its pages.

Skype and Teams – Microsoft’s other two major platforms – remain available.

Video games

In 2000, Beijing halted the sale of all game consoles because of their alleged negative effects on the “mental health” of young users, although they remained available illegally.

After the ban was lifted, Microsoft was in 2014 the first foreign company to enter the video game market in China with its Xbox One console.

Also in 2014, the Chinese competition authorities opened an anti-monopoly investigation against Microsoft and its Windows software.

About 100 inspectors raided the group’s offices in four Chinese cities, confiscating files and questioning employees.

Watch BE + with Ambi Parameswaran: conversation with industry leaders like Jasneet Bachal, Harish Narayanan, Deepali Naair, Siddhesh Joglekar and more


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