Microsoft has decided to sell its MSN China web portal Xichuang Technology, a company co-founded late last year by MSN China's former general manager.

In May, Microsoft said that it would shut down the MSN China web portal. However, the company has entered into a management buyout agreement with Xichuang Technology (Beijing) Co. under which Xichuang would acquire Microsoft Online Network Communications Technology (Shanghai) Co. It will be led by the unit’s former chief executive Liu Zhenyu. Both companies did not disclose the specifics of the deal,  but said that they would continue to work closely together, according to ZDNet.

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Microsoft pointed out that it will continue to work in areas like advertising display technology, an area where Google is currently the global leader. Apart from the MSN portal, Microsoft’s other main China internet business is its Bing.cn search engine, which has also struggled to find an audience.

Microsoft's retreat from the web portal business follows a similar trail of failures by foreign companies in the Chinese Internet market. Google, Yahoo, eBay and most recently Wal-Mart have also chalked losses. Nonetheless, Microsoft stressed that China is still one of its major strategic markets going forward, Forbes reported. The company’s Windows and Office software are still very popular in the market. 

After selling off the unpopular unit, Microsoft plans to continue to invest in China in other businesses, including computing and cloud services. The company will focus on developing more personalized calculations, building smart cloud platforms, as well as attracting more users and partners.

TagsMicrosoft, MSN China web portal, MSN, china, Baidu, Microsoft Office, Bing.cn