Other tech giants like Google and Facebook Ltd — Mostly away from China, Microsoft’s search engine Bing and its cloud-based business software remain. Moreover, its Windows operating system is still dominant in China. LinkedIn said it decided to shut down in China after “faced with a very difficult operating environment and more stringent compliance requirements.” Paul Triolo, head of global technology policy practices for the Eurasia Group, a political risk consulting firm, said these same factors could cause Microsoft to withdraw other products in China. “What are the benefits?” He said. “If you went to China 10 years ago to see some liberalization around censorship, you were patient and willing to establish a foothold. Its calculus is getting better in the short term. It doesn’t seem to be. “ A few weeks before LinkedIn announced its withdrawal from China, Microsoft was reminded that Beijing had to comply with Chinese rules. In September, Microsoft President Brad Smith spoke with Xiao Yachin, head of China’s Ministry of Industry and Information Technology, during a talk about Microsoft’s expansion in China, according to a statement from the ministry. Chinese officials want Microsoft to increase its investment in China’s digital and automation industries, but they also want the company to comply with its regulations, according to people familiar with the matter. Microsoft declined to comment on LinkedIn’s decision this week. He did not immediately respond to requests for comment on the meeting with Chinese officials. Since opening its office in China in 1992, Microsoft has been striving to gain a foothold in China. Despite domestic setbacks such as pirated software, the company sought a long-term strategic view, a former Microsoft China executive said. Smith said in September that China remains a small part of Microsoft’s business, contributing less than 2% of global sales. LinkedIn has had some success in China, gaining more than 50 million users and making it the third largest market after the United States and India. Still, LinkedIn is a small part of Microsoft’s overall business, generating about 6% of its total revenue in the most recent fiscal year. For social networks like LinkedIn, international growth is often the number one source of growth for new users, says Microsoft investor Synovus Trust Co. Said Dan Morgan, Portfolio Manager at. Leaving China could reduce revenue and subscriber growth, he said. China has tightened regulations on technology in recent years, and LinkedIn has been targeted alongside other major companies. In recent months, LinkedIn has informed human rights activists and journalists focused on China that their profiles contain banned content and are blocked in China. When LinkedIn launched the Chinese version in 2014, it knew it had to comply with the requirements of the Chinese government, but said it was worth the trade-off. Mohak Shroff, Senior Vice President of Engineering at LinkedIn, said of his decision to enter the Chinese market, “We strongly support freedom of expression while adopting this approach to create value for members in China and around the world. I did. ” .. Schlov commented in a blog post Thursday announcing his withdrawal from China. LinkedIn does not comment on anything other than blog posts. The tightening of the regulatory environment for managing algorithms, data collection, and processing raises challenges for Microsoft and other multinational companies operating in China. This year, Chinese authorities introduced a proposed regulation that oversees the use of algorithm recommendations. Once these rules are in effect, Microsoft’s search engine Bing may need to tweak its algorithms. If regulatory agencies require it to do so after the review, Carly Ramsey, head of the Greater China political and regulatory risk team at consulting firm Control Risks, does. Launched in China in 2009, Bing could be more sensitive to new regulations, analysts said. According to Statcounter, it has less than 4% market share in the Chinese search engine market, three minutes behind domestic search engine rivals Baidu (82% share) and Sogou (more than 7% share). It is 1. In June, Bing’s presence in China was criticized in the United States when it was discovered that search engines globally blocked the results of iconic “tankman” images related to the 1989 Tiananmen Square incident. rice field. At the time, Microsoft blamed the block for “accidental human error” and restored the image. Another growing business at Microsoft is Teams, a video conferencing and workplace collaboration product. At the start of the pandemic, from late January to early March 2020, Microsoft said there was a 500% increase in meetings, conference calls and conferences through Chinese teams. Still, Microsoft faces fierce competition in this area. Chinese tech giant Tencent Holdings Ltd TCEHY 1.73% And zoom video communication Ltd ZM -0.51% Ltd. runs a popular video conferencing tool in China. Microsoft is unlikely to retreat in China because of its core cloud business service, said Brad Ribak, an analyst at Stiffel Financial Corporation. Through a partnership with 21Vianet Group in China, Microsoft operates cloud businesses in China, including Azure for cloud computing services and Office 365 for its business application suite. Unlike Azure’s solid position elsewhere, Microsoft lags far behind the industry leader in the Chinese cloud computing market.Alibaba Group Holding Ltd Huawei Technologies Co. and Tencent were the largest vendors in the Chinese cloud computing market in the previous quarter, according to researchers Canalys. According to Canalys data, Microsoft’s Azure gained a 2% market share in China in the second quarter of this year, while it gained a 34% share of Alibaba. China Evergrande: Construction stagnation, huge debt Copyright © 2021 DowJones & Company, Inc. all rights reserved. 87990cbe856818d5eddac44c7b1cdeb8 LinkedIn social network leaves China, but Microsoft remains [Source link](//www.wsj.com/articles/linkedin-social-network-is-leaving-china-but-microsoft-remains-11634321277?mod=rss_Technology) LinkedIn social network leaves China, but Microsoft remains
