Microsoft is poised to expand its reach into China's social networking market through a new agreement with leading Chinese portal operator Sina that could shake up the Internet landscape in the country.
Under the agreement, Microsoft's joint venture MSN China and Sina will cooperate in areas including microblogging, blogging, instant messaging, information content and mobile services.
MSN China and Sina will integrate their products so that they work together. For instance, if a user updates their Sina microblog, the update will also be displayed on the user's Windows Live Messenger account. Users with a Windows Live ID will also be able to use the same account to access their Sina microblog. Microsoft's blogging and social networking service, Windows Live Spaces, will also allow users to migrate their information over to a Sina blog.
The partners are touting the agreement as a "win-win" for both companies.
"Not only will it offer more convenience for our users, and provide a rich Internet experience along with applications, but it will also take us one step further in strengthening our two sides' competitive edge," said General Manager for MSN China Liu Zhenyu in a statement.
The companies are hoping to attract others to team with them in order to create a "one-stop" platform.
The partnership, which was announced on Thursday, comes at a time when Tencent, an operator of popular Chinese social networking services, is facing a public relations debacle.
Tencent is one of China's largest Internet companies and competes with both MSN China and Sina. Tencent dominates the instant messaging market with its QQ client. It controls a 76 percent share of the instant messaging market and has 655 million active QQ users, according to Beijing-based research firm Analysys International. MSN Messenger claims just a 4.3 percent market share in China.
At the same time, Tencent operates a leading microblogging site that competes against Sina's service.
But Tencent has been drawn into a dispute with a Chinese security vendor called 360 following claims that QQ's client breaches users' privacy. In response, Tencent announced that all QQ users had to uninstall 360 security software from their computers in order to use the instant messaging client.
The move sparked outrage among Internet users and intervention from the Chinese government. The head of China's Ministry of Industry and Information Technology even called the two companies' recent actions "immoral and irresponsible", according to reports from the state-controlled press.
Many users have reported that QQ is now compatible with 360 security software. But the dispute has put a dent in Tencent's reputation and highlighted the severity of the clashes Chinese Internet companies have engaged in.
The agreement between Microsoft's MSN China and Sina, however, has been billed by the companies as a step toward increased cooperation.
"In the future MSN (China) and Sina will explore and cooperate on a deeper level with our products, in order to offer both our users a more perfect Internet experience," said Sina's chief operating officer Hong Du in a statement.