Microsoft Betting on Asian Networks

In November, Microsoft expanded telecommunication investments in Japan, South Korea, and Taiwan. These investments indicate that Microsoft is betting big on economic recovery and dramatic growth in computer and network use in Asia. The investments also put Microsoft at the bottom of a fast growth curve in Asia and will give it leverage in encouraging Asian companies to use Microsoft platforms.

The Asian Opportunity

Microsoft is jumping to win a stake in the new companies in the fast-growing Asian market, using its large cash reserves to make investments that are not only financial winners but that will also increase its market share and sales of high-end systems in the telecom market. Microsoft frequently uses its stake in ISPs and broadband networks as a lever to win “mindshare” for products such as Windows CE–based set tops, its TVPAK interactive TV delivery system, its Site Server e-commerce solution, and its MCIS platform for ISPs.

Bill Gates has taken a personal interest in Asian opportunities, visiting the region last fall to announce, among other things, development of a new set-top box by a Microsoft research lab in China. In early December, Gates stuck around Seattle to help host the World Trade Organization, where Asian issues were high on the agenda.