Microsoft Corporation has sold its MSN China unit to a local company. The company’s Chinese web portal was struggling due to government regulations and growing competition from local companies, Caixin Online reported. The sale of MSN China follows other tech companies’ similar failures in country, according to the report.
MSN China is a Chinese edition of Microsoft’s global web portal. The sold the web portal to Xichuang Technology (Beijing) Co. Ltd., which was co-founded late last year by Liu Zhenyu, MSN China’s former general manager.
The sale became effective August 10.
Microsoft did not disclose financial terms of the deal. However, the company said that they will continue to work with Xichuang Technology.
Caixin Online said in its report that the sale of MSN China to Xichuang Technology will “help Microsoft shift away from managing display advertising, which is at the core of MSN’s business.”
MSN China competes with domestic rivals such as Sina and Tencent, but the web portal has a small presence in the country. Microsoft sees China as one of its strategic markets, where the company has its biggest research and development center outside the United States.
China appears to be a difficult market for U.S. tech companies. The U.S. tech Apple has been facing a lot of problems in China. In 2010, Google had to close shut down its search service in the country due to censorship concerns.
China is an important market for Microsoft, which sells Windows 10 and Azure cloud services in the country. In a statement, the company said that it will continue to invest in China in other businesses, including computing and cloud services.
In late last year, Microsoft Corporation announced that it teamed up with China Electronics Technology Group to develop and sell its new Windows 10 operating system to Chinese government agencies and state-controlled companies. The deal also included on-going support and services from Microsoft to the customers.
In 2014, Chinese officials began investigating foreign technology companies including Microsoft for violating the country’s Anti-Monopoly Law. The company’s offices in China were raided by roughly 100 investigators because the government believed the tech company wasn’t properly disclosing data about security features in its product. Earlier this year, China’s commerce regulator, the State Administration for Industry and Commerce, ordered the company to “explain some major problems” with data the company turned over to China as part of an ongoing antitrust investigation, the Wall Street Journal reported.
In September last year, the tech company partnered with Chinese search giant Baidu to make it easier for Baidu customers to upgrade to Windows 10 and “deliver a custom experience for customers in China, providing local browsing and search experiences.”
Two months ago, the company announced that it selling about 1,500 of its patents to Chinese smartphone maker Xiaomi.
In other news, Microsoft Corporation is expanding its gaming business including software and hardware. At this year’s E3 conference, the company announced two new consoles, including the Xbox One S and Project Scorpio, which is claimed to be the most powerful console ever built.