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Greater China: Internet titans map growth strategies to tap China surge

BEIJING: Two of the world's most popular websites have unveiled plans to crack China, fast becoming the world's biggest internet market.

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Microsoft is thought to be planning a Chinese version of its MSN website for launch next month, complementing its existing email and messaging services, while Yahoo has reportedly offered its email package to 12 major Chinese sites free of charge to expand its reach. Neither US site was able to comment as Media went to press.

China's main domestic portals have already developed strong content offerings and the battle for web dominance in China is expected to shift to how well players can offer email, messaging and search services. Yahoo's deal with 12 websites, including online travel site Ctrip and games site Haofang, reportedly includes its email, messaging and search services.

Some observers see the alliance as a smart way for Yahoo to develop its position in China, where it has met with regulatory and cultural hurdles in the past. Others took a wait and see attitude.

"It is very difficult for us to sell Yahoo," commented one media agency, who felt it was too early to tell how the move would affect Yahoo's position.

"Their ad base is too limited and too skewed to white collar professionals living in the big cities."

The launch of an MSN site would improve Microsoft's credentials in China, as its existing services are already regarded as strong with a growing user base.

"At the very beginning it won't have a major impact affecting the three major portals, or even Yahoo," commented Ralph Szeto, Greater China director of new media specialist mOne. "But their communication platform is getting strong in China, especially in email and messaging."

Although the initiatives are unlikely to present a challenge to China's status quo in the short-term, advertiser demand and the scale of the online market are likely to offer opportunities to new entrants. "The market is so big. Even a five to 10 per cent share is a lot of money," said Szeto.

This article was first published on Media Asia

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