Connect with us

Microsoft Announces a $ 237 million investment in Chinese Company

Microsoft Announces a $ 237 million investment in Chinese Company


Microsoft Announces a $ 237 million investment in Chinese Company

Microsoft Announces a $ 237 million investment in ChineseREDMOND, WA – On Tuesday, Microsoft (NASDAQ:MSFT) announced that it has invested $ 237 million in Shanghai-listed Internet TV Company, BestTV New Media Co (SH:600637).  The investment will be used to set up a joint venture to develop ‘family games and related services.’  The investment will have registered capital of $ 79 million with BestTV, a subsidiary of Shanghai Media Group (SH:600804), taking a 51 percent stake and Microsoft holding 49 percent.

While the statement did not give further details, analysts believe the ‘family games’ refers to developing games for Microsoft’s Xbox gaming console or online.  Gaming consoles, such as the Xbox, are officially banned in China, partly due to a preference among consumers to play games on personal computers and smartphones.

The joint statement also announced that the new company will be set up in a newly established Free Trade Zone near Shanghai; companies operating there are expected to receive special privileges  including reduces tax rates.  The joint company’s board chairman will be chosen by BestTV and the CEO y Microsoft.

On Monday, the Denver-based 10th U.S. Circuit Court of Appeals threw out a complaint against Microsoft made by Novell.  In the complaint, Novell alleged that Microsoft undermined the WordPerfect writing program in favor of Microsoft’s own Word program with the Windows 95 rollout.  However, the Court ruled that Novell has no viable claims left after the Utah company lost an eight-week trial against Microsoft in Salt Lake City two years ago.  The case was considered by Microsoft that it put Bill Gates on the stand for two days.  During Gates’ testimony, he stated that he had no idea a last-minute decision to drop a tool for outside developers would sidetrack Novell.

Novell claims the decision cost time and market share, forcing the company to sell WordPerfect for a $ 1.2 billion loss.

The announcements over the last two days signify the transition that Microsoft is attempting to make from its previous glory days the Windows OS and Office to the future of streaming media and mobile gaming.  There is little doubt that the software giant is well positioned to be a player in these markets; however, the execution has been lacking.

For example, the new Windows Surface Tablets are touted for business users; however, a recent Gartner survey found that tablet owners use their devices overwhelmingly for entertainment and social media.  Given that the company’s current CEO is retiring many of these questions will have to be answered by the incoming (yet to be named) CEO.  Until that time expect investors to hold on Microsoft until there is more certainty on the company’s direction.

About Michael Reed

Michael Reed covers business and finance related news.

More in Business

Good News


To Top