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REDMOND, Wash. — Jan. 16, 2007 — Microsoft Corp. will offer a glimpse at the future of online advertising this week at its third annual Demo Fest, a two-day gathering on Microsoft’s Redmond, Wash., campus. Wednesday’s event will spotlight breakthrough digital advertising tools by Microsoft® adCenter Labs (http://adlab.msn.com), the innovation engine for the Microsoft adCenter platform. The tools showcased at Demo Fest will come from a portfolio of nearly 60 technologies at various stages of development and represent Microsoft adCenter Labs’ seven new focus areas: keyword and content technologies, ad selection and relevance, audience intelligence, social networking, video, platforms, and devices.

“The technologies showcased at Demo Fest will help create unprecedented opportunity for developers and search engine marketers like the Keyword Services Platform,� said Tarek Najm, distinguished engineer and general manager of Microsoft adCenter at Microsoft. “KSP is a service that provides a framework for researchers to plug in advanced algorithms in the form of building blocks to be consumed by developers for building sophisticated advertiser applications.�Developed by the rapidly growing team of more than 120 Microsoft adCenter Labs researchers and engineers, technologies displayed Wednesday are all designed to help provide the best advertising experiences for users, advertisers and developers. They include the following:
• Keyword Services Platform. The platform provides a set of Web service APIs related to keyword technologies, including keyword recommendation, forecasting, categorization and monetization, enabling developers to build more intelligent applications for online advertising and beyond.
• Commercial intent detection. Advanced keyword analysis helps differentiate consumers who are looking to make an online purchase from those who are searching for information about products or performing other tasks.
• Large display feedback. Vision-based technology creates interactive public displays that can measure the size of the audience, as well as track audience gestures and estimate demographics.
• Social video sharing. This next-generation video sharing solution features a synchronized “commenting� technology. The introduction of novel in-video, synchronized comments enables a new level of interaction between users, opening up the video as a medium for collaboration.
• Content classification: By accurately analyzing and matching the Web pages included in search results, Microsoft adCenter Labs technology helps increase the probability that the ads displayed during Web searches are relevant to consumers.

“Microsoft adLabs research tools show marketers how consumers behave online,� said Aaron Goldman, director of client strategy and development for Resolution Media. “This kind of critical insight is what our industry has sought for years in order to market brands holistically online.�

A complete list and explanations of the technologies showcased at this year’s Demo Fest can be found in the Microsoft adCenter Labs Advanced Tools fact sheet at http://www.microsoft.com/presspass/newsroom/msn/factsheet/adCenterBreakthroughsFS.mspx .

adCenter Labs’ Video Hyperlink Technology to Debut Ahead of Schedule

This spring, Microsoft adCenter Labs will join forces with a national retailer to bring the first Video Hyperlink ad pilot to MSN®. The ad will feature a video segment with embedded hyperlinks for featured products. Consumers who click on the products will be taken to the retailer’s Web page, where they can purchase the item.

“Video Hyperlink technology is a milestone for Microsoft adCenter Labs and symbolizes our promise to innovate and advance the entire industry to new levels,� Najm said. “At last year’s Demo Fest we said that this technology would take us three to five years to get to market, but due to overwhelming community feedback we’ve been able to release it in just one year.�

About MSN and Windows Live

MSN attracts more than 465 million unique users worldwide per month. With localized versions available globally in 42 markets and 21 languages, MSN is a world leader in delivering compelling programmed content experiences to consumers and online advertising opportunities to businesses worldwide. Windows Liveâ„¢, a new set of personal Internet services and software, is designed to bring together in one place all the relationships, information and interests people care about most, with enhanced safety and security features across their PC, devices and the Web. MSN and Windows Live will be offered alongside each other as complementary services. Some Windows Live services entered an early beta phase on Nov. 1, 2005; these and future beta updates can be found at http://ideas.live.com. Windows Live is available at http://www.live.com. MSN is located on the Web at http://www.msn.com. MSN worldwide sites are located at http://www.msn.com/worldwide.ashx .

About Microsoft Digital Advertising Solutions

Microsoft Digital Advertising Solutions encompasses a robust set of global advertising products and services designed to effectively connect advertisers with their target audiences across multiple digital lifestyle touch points. Advertisers can actively engage with a global audience of more than 465 million unique users per month across the MSN network, as well as millions more consumers through Windows Live, Xbox Live®, Microsoft Office Online and Live Search. More information about Microsoft Digital Advertising Solutions is available at http://advertising.microsoft.com .

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT�) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Microsoft’s chief executive Steve Ballmer and president and chief executive of Nortel Mike Zafirovski yesterday took centre stage to launch three joint solutions while detailing what users can expect to see over the coming years as part of their shared vision of unified communications.

The two companies forged the partnership, dubbed the Innovative Communications Alliance (ICA), back in July last year, but hadn’t committed to exact product details or timeframes until now.

Commenting on the myriad of technical solutions businesses currently use to communicate, Ballmer noted that users often leave multiple messages in multiple places.

“It’s a very liveable world,” he said. “But that doesn’t make it the best we can do.”

Microsoft and Nortel said they plan to tackle this and benefit end users, IT departments and those developing business applications by launching three solutions this year, with a solid roadmap for the future.

A Unified Messaging Solution, a hybrid of Microsoft Exchange Server 2007 and Nortel’s Communication Server 1000, will be available from the second quarter of this year. It makes use of native session initiation protocol (SIP) interoperability, meaning installation and management is going to be less of a headache, according to the companies.

Later this year, in the fourth quarter, users will be able to get their hands’ on a product that brings together Microsoft Office Communicator 2007 and features from Nortel’s Multimedia Conferencing offering. The aim is to provide one, single client experience spanning voice, instant messaging (IM), presence and audio and video conferencing applications.

“I think it’s great to have a lot of companies innovating in this area,” said Ballmer.

“Today’s videoconferencing solutions are very, very expensive. It’s tough management to decide which conference rooms get a videoconferencing system. I think it might be nice to democratise videoconferencing.

“I always seem to wind up with a technician standing by every time I have a videoconference, even with our telecom partners. One might think we could also democratise it by making it simpler and easier to use. And I think that the combination of what we’re doing in software and the work Nortel is doing will take us a long way down the path of democratising the category. And it’s good to have other guys also trying to innovate, because, boy, this is a category that needs innovation.”

The fourth quarter of this year will also see the launch of UC Integrated Branch, a single piece of hardware incorporating Microsoft and Nortel technologies to reduce costs and enhance quality of VoIP and unified communications in remote offices.

The companies also plan to beef up an existing offering by extending their unified desktop and soft phone for VoIP, email, IM and presence to the Nortel Communication Server 2100, a carrier-grade system capable of supporting up to 200,000 users.

To support the new offerings Nortel also announced 11 core implementation-oriented services.

To showcase the companies’ new talents, Microsoft and Nortel have created 20 demonstration centres in Asia, Europe and the US, with plans to open another 80 by the end of July.

Since the ink dried on the joint alliance contract, Microsoft and Nortel claim that dozens of customers have bought into their vision, with hundreds more in the pipeline, including Royal Dutch Shell, whose group IT architect Johan Krebbers took to the stage to confirm that the company would be embracing ICA offerings to support its global business operations.

Ballmer said that the solutions would benefit “any company large enough to have an IT department,” but also recognised that the alliance needs to make provisions for smaller companies too.

He also made a quip about the umbrella term used to describe the solutions the joint alliance will produce, suggesting he often jokes with his team that he doesn’t like the name.

“They know I don’t love it because it means everything and it means nothing and doesn’t have a specific meaning to any one customer,” said Ballmer.

“But the truth is this is not the hardest communications challenge we’ve ever had. If you do a demonstration people get it and say they want it. When you try to explain SOA or web services [for example], that’s a little harder to explain unless you’re talking to people who are really technical.

“You go out and do a demonstration, and people say, okay, I get it, I’d like something like that, that looks pretty good. You want to call that unified communications? Okay, we’ll use that word from now on. But in this case I think the demo does help resonate with people quite strongly. Whether we do a demo or other guys do demos, the demos bring alive an important transformation that’s going to happen.”

Microsoft CEO Steve Ballmer addressed the “highest concentration of CEOs in retailâ€? in New York City Monday, touting Microsoft “retail innovation outlook.â€? I attended Ballmer’s keynote to the National Retail Federation Annual Convention; Read my in-depth, first-hand report and analysis in “Microsoft: Steve Ballmer sells to retail in NYC.â€? Ballmer was for the most part on message, the Microsoft retail solutions message. In “Google Checkout: Small retail footprint at retail’s big showâ€? I juxtapose Microsoft’s heavyweight presence at the retail industry’s annual mega event with Google’s under the radar Google Checkout pitch at the show: Microsoft is the leading technology company in terms of market cap, twice the size of Google. Microsoft is doing all it can to maintain its dominance hoping for “Wow,â€? while Google is doing its Googley best to continue to close in. Ballmer included a few subtle, but significant, digs at number two Google during his presentation: Today, I would say we operate in a world that is still relatively primitive. Just take search as an experience, search is a very indirect way today to get at information that people want as they make buying and shopping decisions. You do a search, you find a site, the site may take them exactly to the information, but you don’t get there very quickly. Just take number one search engine Google as a not so quick search experience? During the not so spontaneous “audienceâ€? Q & A, Ballmer concluded his remarks with an unequivocal affirmation of Microsoft’s determination and intent to continue to dominate worldwide: Our tools and technologies are the best in the world at allowing, and the most popular in the world, at allowing your employees to access information. People grow up knowing products like Outlook and Excel, they are the natural place for employees to want to get access to line of business information. Last, but certainly not least, if you take a look at what it will mean in the future what it means today and what it will mean in the future for you to interact with your customers, the heart and soul of that interaction is likely to be a Microsoft operating system, running a Microsoft Internet browser. Google sees things differently. Google has told me: It is possible that people equate the Google search box with their browser window. Google is often used as the gateway to the Internet (as I report and discuss in “Google search PageRank excludes relevant Websites”). Microsoft claims to be the “heart and soulâ€? of technology while Google claims to be the “gateway to the Internetâ€?: WHAT DO YOU THINK?

“With Microsoft Dynamics Retail Management System 2.0, I am able to manage my business from home, handle purchase orders with ease and leverage customer data to drive additional revenue for my business,” said Mitchell Cohen, owner of Bellini with two franchise locations in Wellesley, Mass., that sell furnishing and accessories for babies through teens. “With Microsoft Dynamics RMS, I can look at the buying trends of my customers and target them for future sales. For example, when someone comes in to purchase a baby bed, I know that in a couple of years they will be in the market for a crib and I can proactively reach out to the customer at that time.”

Microsoft Dynamics - Point of Sale pricing starts at $799 (MSRP) for a single store, single lane, software only and is available in the U.S. only. Microsoft Dynamics Retail Management System pricing starts at $1,190 (MSRP) for a single store, single lane and is available in English worldwide.

GABORONE - After serving Orange Botswana, a cellular network company, for two-and-half years, 12 months as a chief executive officer, Mr Thapelo Lippe is leaving the company to join Microsoft in Kenya. Mr Lippe joined Microsoft in Kenya as the country manager, covering both east and central Africa where hes going to be in charge of Microsoft offices in 13 countries, including Botswana.

I truly feel that my time here has been fulfilling, and has given me the opportunity to gain invaluable experience, Mr Lippe said recently.

Orange in Botswana, great as it is, can only be as great as the men and women who work for the company and I thank you my colleagues, for devotion, hard work and dedication.

Mr Lippe explained that when he started at the helm, he was fascinated by the prestigious global brand and a company which in Botswana was not doing terribly well at the time.

I certainly changed a lot in the process. Im pleased to say that Orange also changed dramatically.

Mr Lippe said 12 months ago, Orange Botswana was surviving on overdrafts and advances but now had a healthy balance sheet and was profitable.

He said the companys profit margin increased by 250 per cent. In September 2005, Mr Lippe said, the company had a paltry P800 000 in the bank.

Twelve months later, the balance sheet is reflecting P15 million. Oranges subscribers base has also grown by 60 per cent.

Mr Lippe, who had worked for the information technology industry in the United States, believe that with liberalisation and the forthcoming privatisation of Botswana Telecommunications will enter into a new realm of opportunity and challenge.

I cannot think of a better company and a better team to make the most of those opportunities than the team in Orange Botswana today, he observed. However, Mr Lippes departure was met with mixed emotions at Orange.

The companies Marketing Manager, Mr Kago Mmopi, said: On the other hand we are all very sad at Orange to be parting with such an inspiring, motivating, intelligent and empowering leader, and on the other hand we are very proud that from among us, one of us can be selected for such a prestigious position of heading Microsoft in 13 countries on the African continent.

Mr Mmopisaid during Mr Lippes time as chief executive officer, Orange has realised historic growth in terms of customer acquisitions, revenues, brand awareness and network expansion among others.

I would like to assure you that the momentum behind these achievements will continue in a positive direction as the leadership team remaining will ensure to maintain the pace we have been striding at. BOPA

Have you ever tried to make money through affiliate programs using Google Adwords?

Then you know its not easy. Some say that only 2-3 out of 10 affiliate Adwords campaigns will actually make a profit.

But what if you could get your Adwords campaigns for free, or even make a little profit from using Adwords for promoting affiliate programs.

Actually you can get your Adwords campaigns for free if you combine your Adwords campaigns with Google Adsense.

With Google Adsense you place small ads on your own web-page, hoping that people will click on these ads. When someone clicks on a Google ad on your web-site, you make money.

The normal approach to making money with Google Adsense is to have thousands of pages with Google ads, but you can successfully make money with Google Adsense with just one page.

Thats right - one page!

1. Step
All you have to do is find niches, where people pay several dollars to get the top position in the Google ads. You can use Overtures bidtool to find high priced niche keywords.

2. Step
Next step is to build your one-page Google Adsense money machine. Find a free article in one of the article directories and set up a page with your keyword targeted article and three Adsense ad blocks. Use small Adsense blocks, that only shows the top three high priced ads.

3. Step
Last step is to set up a Google Adwords campaign with that niche keyword (and related keywords) - but you only bid 5 cents!

Now sit back and watch the magic. People click on your 5-cent ad and come to your one-page-Adsense website. They read your article - and some of them will click on the high priced ads on your page. Bingo! - youve made a small profit.

Nothing much, maybe a one dollar profit a day. My first Google Adsense Money Machine is generating a profit of 2-3 dollars a day - thats at least $730 a year for just one page.

Want to make more money with your one-page-money-machine?

Find an affiliate program in that niche, and put your affiliate link on the page. Some of your visitors will click the Google ads and some will click on your affiliate link. What ever they do, you win!

Now youve got your Google Adwords campaign for free or youre even making a small profit with your Google Adwords-Adsense money machine. At the same time youre marketing your niche affiliate program.

Final advice
Dont use this technique in the Internet Marketing market place - its much to crowded. Use your imagination and find niches like laser hair removal, wheel chairs, cell phone, homeowners loan etc.

Take action - and go find some money making niche keywords

Microsoft is targeting the development of software that understands human speech as the next “macro revolution” in computing.Microsoft is targeting the development of software that understands human speech as the next “macro revolution” in computing.mproved speech recognition is being billed as a major advance in Vista, the upgrade to the Windows operating system that Microsoft will release to consumers on January 30. For example, the voice software in Vista, expected to be installed on 500 million machines in the next five years, will “read” its users’ e-mails to familiarise itself with their vocabulary. However, speaking to The Times at the company’s headquarters in Redmond, 13 miles from Seattle, Jim Allchin, co-president of Microsoft’s Platforms and Services division, said machines that actually understand speech - rather than using sounds as prompts for pre-defined actions - would define the next industry breakthrough.

“You can dictate a letter to Vista, but it is not like the Vista really understands what you’re saying. That will be the next revolutionary step,” he said.

Dubbed the “Vista Godfather”, Mr Allchin is a member of Microsoft’s Senior Leadership Team, who, the company says, is “responsible for developing Microsoft’s core direction … along with [chief executive] Steve Ballmer and [chairman] Bill Gates”.

Speech-controlled devices already feature heavily in Microsoft’s “home of the future”, a showcase of “tangible prototypes” at its Redmond campus. The high-tech house, a “concept car-type model” of the near future, is controlled through “Grace” a talking, listening user interface named after Grace Hopper, a pioneer in early computing languages.

“I’ve got a young son. He’s going to grow up thinking nothing of talking to walls,” Jonathan Cluts, Microsoft’s director of strategic prototyping said.

Microsoft Research, the group’s internal research unit, already has groups in Redmond and Beijing working on building a “fully speech-enabled computer”. Such is the reach of Microsoft’s development campus, as much as a quarter of America’s computer PhDs serve an internship at one of its labs.

Grace plays a starring role among the featured technologies in the Microsoft home, all of which the group believes can be introduced to market within the next five to ten years, and at a cost not 20 per cent above an equivalent item today.

In the entertainment room, for example, a parent reading out a pre-programmed storybook to a child triggers the room’s lights to dim. An appropriate backdrop is beamed on to the walls from a panel of embedded lightcams in the ceiling, while a stereo system provides sound effects. When the parent reads out “the cow jumps over the moon” from the story, a matching animation appears on the room’s widescreen TV.

With the introduction of “partypack” software, the ceiling-installed lightcams beam place settings on to a dinner table. In front of each guest appears a control panel for a 2-D aeroplane, projected on to the surface. Cover up portions of the controls and you “fly” the plane around the table. The group of hardened technology journalists being shown the device actually groaned with disappointment when it was time to move on and the game was turned off.

LED wallpaper, a super-thin lighting technology being used by Philips, decorates a child’s bedroom and can be programmed to give different backgrounds or to show webcam-style views into other children’s rooms via the internet. The feature replicates an online networking site-style environment in the physical world, Microsoft says.

However, those hoping that robotic assistants will revolutionise daily chores will be disappointed. “We just don’t believe [that robots] are on the same cost curve as silicon,” Mr Cluts said. “They are not going to get cheap in the same way as software is.”

Instead, the RFID radio technology already used by groups such as Wal-Mart to identifiy and track warehouse stock plays a prominent role. Using RFID tags embedded in packaging, the Microsoft house is able to recognise and make an inventory of the goods in the larder. It can then send a list to a mobile phone, if you are out shopping. Place some ingredients on a work top in the home and a sensor hidden below will identify them and Grace will ask you if you need help. Answer “yes” and the house will beam a list of possible recipe ingredients on to the work surface from a lightcam embedded in the ceiling – giving you a warning if you are missing any ingredients.

The same RFID tags, which cost less than a penny each, can also be placed into toys, determine their location, and assess how tidy a child’s room is. This tracking system is tied into a “fun credits” scheme – where a child can earn time playing a computer game by tidying his or her room or by putting toys into their proper places.

The home, which undergoes a major revamp every two years, has a record of correctly predicting trends. One of the key concepts when the original version was opened in 1994 was audio on demand. “That was really the idea that you’d be able to pick whatever music you wanted to play in your house at any time,” Mr Cluts said. “And lots of internet services enable that today.”

However, he admitted that what most visitors want to know is how many of these gadgets have found themselves into Bill Gates’s house?

“Yes, Bill has a very advanced home,” Mr Cluts said. “But you have to understand, he has a much larger budget than us.”

I’ve come to expect moves like this from Microsoft, but it makes no less annoying to deal with. Apparently the new version of Microsoft Outlook, Outlook 2007, will use the HTML rendering engine from Microsoft Word to display HTML email. Previously Microsoft Outlook used the rendering engine from, logically, Microsoft’s web browser Internet Explorer. What does this mean to you, dear email marketer?

Aside from having to test your existing HTML newsletter layouts in the new client thoroughly, you will also most likely need to back-date your newsletter code about 5 years. That’s right folks, its back tables galore and in-line styles! If you aren’t the person who has to code your HTML emails and you have no idea what that means, suffice it to say, there’s probably a lot of work to be done.

Why has Microsoft elected to do this you might wonder? From the links above and common sense it sounds like security is most likely the reason. There are just so many ways to exploit the Internet Explorer rendering engine that it makes Outlook a great entry way for malicious worms and viruses. But do they think that that Word rendering engine will really stand up long against the inevitable onslaught of spammers and other would be email “evil doers?� I think not.

We’ve done a few email newsletter templates for our clients that should stand up to this issue pretty well. You can check them out here and here. But who knows until we actually get to test them out. Anyone running a beta of Outlook 2007 who can run those through it for me?

When John Carmack speaks, the industry tends to listen. While it can be argued that his influence today on the gaming industry isn’t as big as it was when nearly every 3D shooter was using one of his Quake engines, he is still regarded as part of the heart of that keeps PC gaming alive. He continues to influence gaming hardware too, especially in the area of graphics. In fact, NVIDIA and ATI consult with John Carmack on design decisions when engineering new GPUs.

Carmack and id Software were recognized last week with two Technology Emmy Awards from the National Academy of Television Arts & Sciences for the areas “pioneering development work in 3D game engines� and “technological leadership in rendering breakthroughs with the Quake technology.�

At CES, Game Informer magazine sat down with John Carmack and Todd Hollenshead of id Software to discuss many facets of the game industry as it applies to both PCs and consoles. Right away, Carmack confirms that he is working on a new engine for a completely new franchise not based on any of the company’s currently existing intellectual properties. Carmack said that Quake Wars, which is based on an upgraded Doom 3 engine, not be a DX10 game.

On the topic of DX10, Carmack said that there’s nothing at the moment motivating him to move to the new API just yet for Quake Wars, citing that he’s quite satisfied with DX9 and the Xbox 360. “DX9 is really quite a good API level … Microsoft has done a very, very good job of sensibly evolving it at each step–they’re not worried about breaking backwards compatibility–and it’s a pretty clean API,â€? he said. “I especially like the work I’m doing on the 360, and it’s probably the best graphics API as far as a sensibly designed thing that I’ve worked with.â€?

Gamers often look to Carmack to tell the fortunes of PC gaming hardware. His opinions on hardware can sway hardcore gamers to purchase one hardware choice over another. Those in awe of the potential offered by DX10 may want to hold off on that shiny graphics card purchase, as Carmack says that there isn’t a huge need for new hardware just yet, as current hardware is more than adequate. “All the high-end video cards right now — video cards across the board –are great nowadays,â€? he said. “Personally, I wouldn’t jump at something like DX10 right now. I would let things settle out a little bit and wait until there’s a really strong need for it.â€?

Those wishing to take the plunge into DX10 will also have to do so while upgrading to Windows Vista. Carmack, however, isn’t all that excited about upgrading to the new OS: “We only have a couple of people running Vista at our company. It’s again, one of those things that there is no strong pull for us to go there. If anything, it’s going to be reluctantly like, ‘Well, a lot of the market is there, so we’ll move to Vista.’�

Carmack then said that he’s quite satisfied with Windows XP, going as far to say that Microsoft is ‘artificially’ forcing gamers to move to Windows Vista for DX10. “Nothing is going to help a new game by going to a new operating system. There were some clear wins going from Windows 95 to Windows XP for games, but there really aren’t any for Vista. They’re artificially doing that by tying DX10 so close it, which is really nothing about the OS … They’re really grasping at straws for reasons to upgrade the operating system. I suspect I could run XP for a great many more years without having a problem with it,â€? he said.

Then on to the topic of multi-core gaming systems. Carmack has expressed his dislike for multi-cores, but with the two high-powered new generation consoles both making use of multiple cores, it may be something he just has to deal with. He says of the Xbox 360: “Microsoft has made some pretty nice tools that show you what you can make on the Xbox 360 [with the multi-cores] … but the fundamental problem is that it’s still hard to do. If you want to utilize all of that unused performance, it’s going to become more of a risk to you and bring pain and suffering to the programming side,� he laments. “So we’re dealing with it, but it’s an aspect of the landscape that obviously would have been better if we would have been able to get more gigahertz in a processor core. But life didn’t turn out like that, and we have to just take the best advantage with it.�

As far as the PlayStation 3 goes, Carmack isn’t thrilled at the lack of developer support in comparison to what he’s received from Microsoft. Nevertheless, he plans to support Sony’s console with his next generation engine and games. “We’ve got our PlayStation 3 dev kits, and we’ve got our code compiling on it. I do intend to do a simultaneous release on it. But the honest truth is that Microsoft dev tools are so much better than Sony’s,â€? he comments. “I think the decision to use an asymmetric CPU by Sony was a wrong one. There are aspects that could make it a winning decision, but they’re not helpful to the developers … It’s not like the PlayStation 3 is a piece of junk or anything. I was not a fan of the PlayStation 2 and the way its architecture was set up. With the PlayStation 3, it’s not even that it’s ugly–they just took a design decision that wasn’t the best from a development standpoint.â€?

Finally, the console wheel spins to the company from Kyoto, which Carmack says that id Software has never “been that tight with.� He does express his respect Nintendo’s courage to take a different direction with input methods in controlling games, but his current and next generation of game technology is not targeted at the Wii.

SHANGHAI–Microsoft is set to launch its popular Xbox 360 game console in China in the next few months, expanding beyond its traditional focus on selling PC software in the country, industry sources said.

The software giant has been discussing the launch with local Internet service providers and personal computer makers since late last year, and plans to appoint several sales agents for Xbox 360 in the mainland, sources in the consumer technology sector said.

Microsoft is also checking with the Chinese government, including the culture and information ministries, that authorities are comfortable with the product, the sources said.

The government reviews the content of video games sold in China and has been cautious about approving the sale of imported games, so its stance may be the main factor determining when Xbox 360 sales begin.

Microsoft has declined to give a specific timeframe for when Xbox 360 will begin selling in China, but some stores in major cities such as Shanghai have told potential consumers that it may be available for sale around the lunar new year in the middle of February, retail industry sources said.

Microsoft said in 2005 it intended to launch the Xbox 360 in China. But it has not announced a timeframe partly because of uncertainty over Chinese regulators’ attitude to the product, according to Chinese media.

“We take a long-term approach to each market and continue to evaluate the China market for opportunities,” Andres Vejarano, Regional Marketing Director at Microsoft’s Entertainment & Devices Division for Asia & Greater China, said in an e-mailed response to a Reuters enquiry about the launch.

A standard Xbox 360 set sells for about $300 in Hong Kong, where the system was first launched in November 2005. More than 10.4 million Xbox consoles had been sold worldwide by the end of 2006.

The Xbox 360, Sony’s new PlayStation 3 and Nintendo’s Wii are fighting it out in the $30 billion global video game market. In China, however, the Xbox’s main competition for now is likely to be the popular PS2, which Sony launched in China three years ago.

China is a fast-growing gaming market, where more than 120 million people out of a population of 1.3 billion are Web users. However, online gaming in China is far more popular than traditional consoles due to the big price difference.

“Microsoft definitely hopes to launch its Xbox 360 as soon as it can and a clear plan has been set for 2007,” said a person familiar with the situation, who declined to be named.

“The company has been talking to a wide range of potential sales agents, getting feedback from game testers and experimental users, and doing everything they can with the sole aim of launching Xbox in China as soon as possible,” he said.

The launch may be a sign that China’s increasingly affluent consumers are starting to form a viable market for the more expensive console games. But how Microsoft prices the Xbox will be key, said Florian Pihs, assistant vice president of market research firm Analysys.

“Microsoft has to choose whether to go for better software protection or if they’re going to charge more for the Xbox because there are already some gray imports,” he said, adding that most firms launching games expect them to trigger piracy.

“The reason, however, that they are doing it anyway is because Microsoft wants to develop the Chinese software development community … they already have teams that have software development for Xbox in China,” Pihs said.

“Either way it’s going to be a tough market for them.”