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By Josh Horwitz
SHANGHAI, Aug 10 (Reuters) - Microsoft Corp has emerged as the most likely buyer of the U.S. operations of TikTok, the popular Chinese short-video app that U.S. President Donald Trump is preparing to effectively ban on national security grounds.
A deal would be in line with Microsoft's stance toward China where the firm has a sizeable presence - unlike fellow U.S. tech heavyweights such as Facebook Inc and Alphabet Inc's Google which appear to have given up on China's consumer-facing market with its miscellany of government strictures.
The country accounts for over $2 billion in annual revenue, Microsoft President Brad Smith said earlier this year.
WHAT DOES MICROSOFT DO IN CHINA?
Microsoft employs roughly 6,000 people in the country, with offices in Shanghai, Beijing and Suzhou.
Its flagship Windows operating system is widely used, though revenue has long been crimped by piracy. In recent years the firm has pushed its Azure cloud computing product, launched in 2013 via a partnership with local data service company 21Vianet.
China's cyber-security law limits Microsoft to providing Azure's software and services while 21Vianet runs associated data centres. It is a small player in a sector dominated by local providers Alibaba Group Holding Ltd, Baidu Inc , Tencent Holdings Ltd and Huawei Technologies Co Ltd.
Microsoft operates both its Bing search engine and LinkedIn social network in China, though again is a small player compared with local giants.
Its most important China operation is arguably the Microsoft Research Asia, famous as a leader in artificial intelligence (AI).
Founded in 1998 with help from renowned Taiwanese-American AI scientist Kaifu Lee - who went on to lead Google's China office - the lab has produced alumni who went on to become executives at TikTok owner ByteDance, Baidu, Xiaomi Corp and Chinese facial recognition unicorns.
DOES MICROSOFT SELF-CENSOR IN CHINA?
Bing and LinkedIn in China appear similar to their global counterparts but Microsoft censors search results and content the Chinese government considers sensitive.
Upon LinkedIn's China launch in 2014, two years before the company was bought by Microsoft, then-Chief Executive Jeff Weiner said censoring content would be "necessary" for the firm to grow in the country.
In 2019, free speech advocates criticised LinkedIn's position on censorship after human rights activist Zhou Fengsuo said his profile was not viewable in China. LinkedIn blamed an "error" and restored its visibility.