Microsoft’s Successful Partnership with Thousands of Companies in China: Bill Gates’ Contributions
Image: Microsoft’s success in China
The Chinese market has always presented challenges for American internet companies. While Google and Yahoo! had to compromise on censorship issues to maintain access to this massive market, they eventually had to halt their search engine operations in China. Facebook, Snapchat, and Twitter (now known as X) are also unavailable to Chinese users.
On the other hand, Microsoft, with its strict compliance to Chinese censorship requirements, has been able to maintain the local version of Bing since 2009. Co-founder Bill Gates has long supported close collaboration with China to promote innovation in healthcare and science, despite concerns about censorship. Although Gates stepped down from Microsoft’s board in 2020, he continues to visit China and met with President Xi Jinping in June 2023, where he was referred to as the “old friend.”
Satya Nadella, Microsoft’s CEO for the past decade, has echoed Gates’ views on the benefits of providing internet services even in the most challenging markets. In 2020, China accounted for only 1.8% of Microsoft’s global revenue.
Despite China’s small share in Microsoft’s revenue, Bing has been steadily progressing. According to StatCounter, a data tracking tool, Bing surpassed Baidu, the leading search engine in the market, and became the top desktop search engine for a period of five months in 2023. This achievement was repeated in January this year.
According to Bloomberg, Microsoft has established partnerships with thousands of Chinese companies in various sectors such as retail, manufacturing, healthcare, automotive, and energy. These local activities enable the tech giant to recruit talent and achieve specific objectives.
In September 2022, Microsoft’s head in China, Yang Hou, announced plans to expand the company’s workforce in the country by over 10,000 employees. He stated, “Microsoft will continue to strengthen its trust and determination to develop in China.”
Liu Pengyu, spokesperson for the Chinese Embassy in Washington, D.C., stated in a press release that the internet in China is “free, open, and orderly.” The country welcomes foreign companies operating there.
“Countries with foreign investments in China should abide by Chinese laws and regulations, respect interests, cultures, and traditions, and fulfill social responsibilities,” he added.
Microsoft claims that Bing is the search engine with the least censorship in China, although the censorship system remains complex. The blacklist continues to expand, including thousands of websites, keywords, and phrases.
In China, Bing filters Western news websites and Wikipedia, and certain sensitive searches do not yield detailed results.
Bing was launched in China on June 1, 2009, despite the previous sudden blocking of access by the Chinese government. It remains unclear what specific concessions Microsoft made to resume operations.
While Microsoft adapted to the conditions, Google decided to withdraw. Although Google had operated its search engine in China since 2006, it announced its halt in January 2010 after a cyber-attack on its infrastructure.
Microsoft’s business strategy for Bing focuses on delivering better search results with fewer advertisements compared to local competitors. Baidu, in particular, has faced criticism due to excessive advertising.
In a report published in April 2023, researchers at the University of Toronto’s laboratory analyzed around 500,000 censored keywords and names across search engines. They discovered that Bing had fewer overall censorship instances compared to Baidu.
When a Bing user in China enters a search query, the request is routed to servers located in China to apply the filtering system that eliminates sensitive information. This process is similar to how Microsoft and Google comply with laws in various countries.
According to Microsoft employees, this censorship technology relies on machine learning systems that analyze text, images, and metadata, scanning websites to determine if they violate local laws or regulations. Microsoft states that they do not use automation to determine which new content to block.
Previously, Microsoft also established an advanced AI laboratory in Beijing in 1998. At that time, Bill Gates referred to it as an opportunity to tap into China’s “deep pool of intellectual talent.”
Amidst ongoing geopolitical tensions, Microsoft’s top leadership, including CEO Satya Nadella and Chairman Brad Smith, recently discussed the next steps for their research lab. They have established boundaries regarding sensitive political matters.
“We have made a lot of commitments to the premier research lab. There has been no discussion about closing Microsoft Research Asia. We want to continue our research program,” said Peter Lee, head of Microsoft Research—a network comprising eight labs worldwide.
This discussion has garnered attention as Microsoft, along with Apple and Tesla, is one of the few major US technology companies maintaining a presence in China. Since China nurtured its domestic technology sector, American companies have reduced their presence.
Source: Bloomberg, The New York Times