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Rationalization: Microsoft's TikTok provide sheds gentle on the Home windows maker's historical past with China

© Reuters. A person walks past a Microsoft logo in the Microsoft Beijing office

By Josh Horwitz

SHANGHAI (Reuters) – Microsoft Corp. (O 🙂 has emerged as the most likely buyer of US operations from TikTok, the popular Chinese short video app that US President Donald Trump is effectively banning for national security reasons.

A deal would be in line with Microsoft's stance on China, where the company has a sizable presence – unlike other US tech heavyweights like Facebook Inc. (O 🙂 and Alphabet Inc & # 39; s (O 🙂 Google, which appear to have abandoned China's consumer market with its multitude of government restrictions.

The country has annual sales of over US $ 2 billion, Microsoft President Brad Smith said earlier this year.

WHAT DOES MICROSOFT DO IN CHINA?

Microsoft employs around 6,000 people in the country and has offices in Shanghai, Beijing and Suzhou.

The flagship of the Windows operating system is widespread, although piracy has long hurt sales. In recent years, the company has further developed its Azure cloud computing product launched in 2013 through a partnership with the local data service company 21Vianet.

China's cyber security law limits Microsoft to the provision of Azure software and services, while 21Vianet operates associated data centers. It's a small player in a sector that is dominated by local providers Alibaba Group Holding Ltd (N :), Baidu Inc (O :), Tencent Holdings Ltd (HK 🙂 and Huawei Technologies Co Ltd.

Microsoft operates both its Bing search engine and the social network LinkedIn (NYSE 🙂 in China, but is again a small player compared to local giants.

The most important company in China is arguably Microsoft Research Asia, known as a leader in artificial intelligence (AI).

The laboratory was founded in 1998 with the help of the renowned Taiwanese-American AI scientist Kaifu Lee, who later headed the Google office in China. It spawned alumni who later became executives at TikTok owner ByteDance, Baidu. Xiaomi (OTC 🙂 Corp (HK 🙂 and Chinese face recognition unicorns.

DOES MICROSOFT DO SELF-CENSOR IN CHINA?

Bing and LinkedIn in China are similar to their global counterparts, but Microsoft censors search results and content that the Chinese government deems sensitive.

When LinkedIn launched in China in 2014, two years before Microsoft bought the company, then CEO Jeff Weiner said that content censorship was "necessary" for the company to grow in the country.

In 2019, free speech advocates criticized LinkedIn's position on censorship after human rights activist Zhou Fengsuo said his profile was not visible in China. LinkedIn blamed a "mistake" and restored its visibility.

The software development website GitHub, which Microsoft purchased in 2019, is also accessible from China. The website, a coding repository, was used by activists in China to get internet content before authorities censor the source.

DOES MICROSOFT HAVE SCRAP WITH CHINA'S GOVERNMENT?

Microsoft has been lamenting rampant Windows piracy in China for decades, and has occasionally even filed lawsuits and complaints against government-sponsored companies to allay its concerns.

The most notable dispute with the government came in 2014 when authorities raided four Microsoft offices to gain access to contracts and other information as part of an antitrust investigation.

In the same year, the government called on all authorities to ban the purchase of Windows 8 for security reasons.

Microsoft finally released a "China Government" edition of Windows 10 after a joint venture that started in 2015 with the state-owned China Electronics Technology Corp. Founded.

WHAT ABOUT BILL GATES?

Microsoft co-founder Bill Gates has spoken mostly positive about China in recent years. In November, he held a public meeting with President Xi Jinping's wife, Peng Liyuan.

Also late last year, Gates criticized the US government's restrictions on telecommunications equipment maker Huawei and spoke about distributing Windows source code to the Chinese government, which helped the software's official acceptance in the country.

He has praised China's response to COVID-19 for which Xi publicly thanked him, and the Bill & Melinda Gates Foundation has donated $ 5 million to China in support of COVID-19.

The foundation is one of the few foreign charities or non-governmental organizations that has continued its operations in China, where it has worked with government and academic institutions against diseases such as malaria and tuberculosis.

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