Microsoft executives have indicated repeatedly that the company intends to stay in China and compete aggressively for the search and cloud-computing markets, despite some recent controversy in which Google briefly threatened to end its operations in China. Both Microsoft and Google lag behind homegrown Chinese search engine Baidu in that market, considered one of the world's fastest-growing. Microsoft CEO Steve Ballmer and Google CEO Eric Schmidt have reaffirmed their commitment to human rights within the context of doing business in China.
A Microsoft executive indicated that the company plans to stay the course in
the recent dispute between Google and the Chinese government that saw the
search engine giant threatening to pull its operations out of the country.
"Regardless of whether or not Google stays, we will aggressively
promote our search and cloud computing [in China]," Zhang Ya-Qin,
chairperson of Microsoft's Asia-Pacific R&D Group, told Reuters on
"We hope to achieve a relatively important place in the China
search market ... but we must be very patient, we need a lot of time."
Google threatened to pull out of China
on Jan. 12 after a widespread cyber-attack that the company claimed targeted
the Gmail accounts of Chinese human rights activists. The Chinese government
has repudiated accusations that it was involved in the cyber-attacks, which
additionally struck over 30 companies and supposedly originated from the
One of the pieces of malware involved in the attack, according to a Jan. 14
analysis by McAfee Labs, utilized a zero-day vulnerability present in Microsoft
Internet Explorer. Microsoft would later pinpoint that vulnerability as an
invalid pointer reference affecting Internet Explorer versions 6, 7 and 8.
"Accusation that the Chinese government participated in the
cyber-attack, either in an explicit or inexplicit way, is groundless and aims
to denigrate China,"
a spokesperson of the Chinese Ministry of Industry and Information Technology told
the newspaper Xinhua in January.
"We [are] firmly opposed to
During Google's fourth-quarter earnings call on Jan. 21, CEO
Eric Schmidt seemed to retreat from Google's earlier, more belligerent position,
saying, "We have made a strong statement [that] we wish to remain in China.
We like the Chinese people. We like our Chinese employees. We like the business
opportunities there and we would like to do that on somewhat different terms
than we have. But we remain quite committed to being there."
On Jan. 29, Schmidt emphasized a similar line of argument at
the World Economic Forum
in Davos, Switzerland:
"We love what China
is doing as a country and its growth. We just don't like the censorship. We
hope to apply some negotiation or pressure to make things better for the
But whether Microsoft sees the potential for some sort of opening in the
aftermath of Google's conflict, or whether Microsoft's executives merely want
to re-emphasize for the media that the company intends to keep cordial
relations with the Chinese government, is information likely to be closely held
by the strategists in Redmond, Wash.
"Engagement in China
and around the world is very important to us, in part because we believe it
accelerates access to 21st century technology and services and helps provide
the widest possible range of ideas and information," Microsoft CEO
Steve Ballmer wrote in a Jan. 27 post on the official Microsoft blog. "We
have done business in China
for more than 20 years and we intend to stay engaged, which means our business
must respect the laws of China."
However, Ballmer added in that post, "Microsoft is opposed to
restrictions on peaceful political expression, and we have conversations with
governments to make our views known. In every country in which we operate,
Microsoft requires proper legal authority before we remove any Internet
content; and if we remove content, we give users notice."
Google and Microsoft in search lag behind homegrown search engine Baidu, which
commanded 56 percent of that market at the end of 2009, as compared with
Google's 43 percent. According to analytics company StatCounter, Yahoo
and Bing's combined share of the Chinese search market
stood at around 1.18
percent through 2009.