According to foreign media reports, Microsoft plans to invest US$ 20 million to establish a research center regarding Internet business in China's Shanghai City. The center is likely to be entitled "MSN Research and Development Center" and it will become the first research and development center established by Microsoft.

This initiative is an indication that Microsoft will not give up its Internet business in China, even though the company has faced localization problems in the past.

Resources say that the center will be located in Shanghai's Black Bamboo Technology Park where Intel also has a research center. 20 million U.S. dollars will be invested in the center. Besides doing research, it will establish a technology support center with the instant messaging service MSN as its subsidiary.

Recent reports indicate that the main task of this research and development center is to develop localized Internet software. However, it is not clear about the relationship between the center and the LIVE business.

At present, MSN is the second most popular instant messaging tool in China with a total of 20 million users, following QQ. However, due to the undersea cable accident, MSN's localization and customer service resulted in users' suspicions and many MSN users turned to QQ.

Microsoft has yet to give any official comments on the Shanghai Internet Business Research and Development Center.

Before the earthquake, Microsoft's development in China's Internet market was not going smoothly. Although it still has Hotmail and instant messaging MSN to its advantage, its Chinese portal website msn.com only ranked 50th or so in the rankings of website traffic (Chinese website rankings by CNNIC). In addition to this, the MSN/LIVE Chinese search even ranked next to the end of the rankings.