NetEase to become MSN partner in China

SHANGHAI: Chinese online game operator NetEase.com may be looking to buy into the joint venture between Microsoft  and a Shanghai investment company to operate MSN in China, local reports said on Wednesday.

Microsoft formed a joint venture with Shanghai Alliance Investment in 2005 to introduce MSN, an instant messaging platform and internet portal, to the mainland. But MSN has struggled to gain traction with Chinese users and compete effectively with homegrown titan Tencent Holdings' QQ platform.

Sohu IT news reported late on Tuesday, quoting investment community sources, that Shanghai Alliance had been looking to exit the joint venture since 2007 and that Microsoft was shopping around for new joint venture partners.

Microsoft and NetEase were close to completing a joint venture deal, sources told Sohu.

NetEase and Microsoft declined to comment, while Shanghai Alliance Investment could not be reached for comment.

China has the world's largest Internet market by users at 384 million at the end of last year.