Microsoft to build $280mln R&D center in Beijing

Microsoft announced an unexpected 44.6-billion-dollar bid for Yahoo Friday, as a latest move by the software giant to challenge Google's dominance of the lucrative online search and advertising markets.(Xinhua/Reuters File Photo)

BEIJING, May 6 -- Software giant Microsoft yesterday said it will invest 280 million U.S. dollars to build a research and development center in Beijing and significantly expand its research team in the country.

The new R&D campus, set to accommodate 5,000 employees, will become Microsoft's largest research center outside the United States when it is completed in 2010, said Zhang Yaqin, the company's China chairman.

"Through investments such as this, we are building on our capabilities as one of Microsoft's key global R&D centers," said Zhang.

He said the company will hire 1,000 new research employees in China in the next fiscal year, which starts in July.

Microsoft currently has 3,000 research staff in the country, with 1,500 full-time employees and another 1,500 working on a project basis, Dow Jones has reported. The company has said it will double the number of its full-time research employees in China to 3,000 in the next three years.

Last year, Microsoft invested about 280 million dollars in its R&D activities in the country, said Zhang Hongjiang, chief technology officer of Microsoft's China R&D Group. The company also recruited 1,000 new employees to its China R&D Group last year, making it Microsoft's largest research team outside the US.

About 80 percent of the company's 3,000 research staff in the country develop products for worldwide users and only 20 percent of them work specifically for demand from emerging markets such as China, Zhang said.

"But I expect this percentage to grow in the future," he said.

Microsoft started its first R&D center in China as early as 1995. The company now has research facilities in Beijing, Shanghai and Shenzhen.

These investments are said to have helped Microsoft win support from the Chinese government and boosted sales in the Chinese market.

PC shipments in China reached 36.84 million units last year, research firm IDC has said. It predicted the number to grow at an average rate of 17.2 percent until 2011, when shipments will hit 64.94 million units.

The country also has the world's largest number of Internet and mobile phone users, offering what is believed to be huge opportunities for IT companies.

Microsoft does not disclose its revenue from the Chinese market. But Fortune Magazine estimated in a story last year that the software giant's revenue from China would exceed 700 million dollars last year, about 1.5 percent of Microsoft's global sales.