Microsoft Signs Research Licenses With Chinese Firms

Microsoft Corp. (MSFT), the world's largest software maker, said it will license technology developed in its research labs to Chinese companies for the first time.

Comtech Group Inc., which provides software to Chinese makers of phones and consumer electronics, and Hunan Talkweb Information System Co., a seller of mobile-phone programs, will license the Microsoft software. The two companies will share revenue from any related products with Microsoft, said David Harnett, senior director of Microsoft's IP Ventures effort.

Microsoft's IP Ventures started in 2005 to gain revenue and attention for research projects that sometimes take years to work their way into the company's products. Redmond, Washington-based Microsoft has more than 150 researchers in its Beijing lab, where the technology was developed, and is trying to benefit from falling rates of software piracy in China.

Comtech, which creates customized bundles of software for more than 200 clients, will license a program that lets users shuffle through a large collection of photos on a mobile phone, as well as software for sending video to phones with slower connections, said Hope Ni, chief information officer.

Talkweb is licensing a program called Personalized Facial Sketch, which lets customers take a photo of a person and turn it into a cartoon for sharing on a mobile phone. The service will be available in November, said Lixinyu Li, chief executive officer of Talkweb, through a translator.

``If we develop this technology ourselves, it will cost us more time and more money,'' he said.

Shares of Microsoft rose 18 cents to $28.71 as of 4 p.m. New York time in Nasdaq Stock Market composite trading. They have risen 9.8 percent this year.

To contact the reporters on this story: Dina Bass in Seattle at dbass2@bloomberg.net

To contact the editor responsible for this story: Emma Moody at emoody@bloomberg.net.

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