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Microsoft will sell its MSN China portal to Xicuhuang Technology, a Chinese entity led by a former MSN China general manager.

The company confirmed the news on the Microsoft China blog earlier this week. It’s a turn of events, given that in May, Microsoft said it planned to shut down MSN China.

But now the portal is in the hands of Xicuhuang Technology, a year-old company started by Anderson Liu, a former general manager at Microsoft Online.

Caixin Online reported that the MSN China sale highlights difficulties that other foreign companies have with growing web-based businesses in China. From its report:

Like many foreign Internet companies eager to tap the lucrative Chinese market, Microsoft’s MSN China portal never gained traction due to government regulations and stiff competition from homegrown rivals, despite Microsoft’s dominance in computer operating systems.

In the blog post announcing the MSN China sale, Microsoft said it will “continue to invest in the Chinese market,” as China “will continue to be one of Microsoft’s most strategic markets.”

As Forbes notes, this deal comes just months after Chinese device maker Xiaomi acquired nearly 1,500 Microsoft patents. Xiaomi will also pre-install Office and Skype on its Android-based smartphones as part of the agreement.

Microsoft also struck a deal last week to preload some of its most popular programs onto a portion of Chinese tech giant Lenovo’s Android devices. The company has other partnerships with Chinese companies, like its deal with search giant Baidu.

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