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Ownership issues prevent Messenger-Skype merger in China

Microsoft's Skype and Messenger services are both offered as part of joint ventures in China, and any merger will require the restructuring of both Chinese companies.
Written by Liau Yun Qing, Contributor

Microsoft will have to overcome ownership hurdles if they hope to merge their Messenger and Skype services in China.

Chinese news site Sina Tech reported Wednesday that while Microsoft owns Messenger and Skype, the two services are offered via joint ventures with local Chinese companies. Any plans to merge the two offerings and retire Messenger from China might complicate the structure of both companies, it said.

In a blog post Wednesday, Microsoft-owned Skype said the instant messaging tool Messenger will be retired in the first quarter of 2013 but not in mainland China. However, the post did not explain why China was left out.

In 2004, Skype launched a modified version of its software in China to comply with local regulations with help from TOM Online. A year later, the two companies entered a joint venture with TOM Online holding the majority 51 percent stake.

However, in July this year, it was reported that TOM Online might lose its local operating rights for Skype as the Chinese company failed to renew its contract with the U.S. VoIP (voice-over-Internet-Protocol) service provider.

As for Messenger, the instant messaging service is offered by Shanghai MSN Network Communications Technology Company, otherwise known locally as MSN China. MSN China is a joint venture between Microsoft and Shanghai Alliance Investment and was formed in May 2005. 

If Microsoft does decide to merge Messenger with Skype, it will have to make adjustments to the structure of both Chinese companies, Sina Tech reported.

A separate report by Chinese tech news site tech.ifeng.com Wednesday cited Liu Zhenyu, general manager of MSN China, as saying there will be no layoffs at the company as the Skype-Messenger merger does not affect China.

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