Much to the dismay of the computer giant's critics and human rights activists, the company based in Redmond, Wash., has been agreeing to abide by the Chinese government's regulations on restricting freedom of speech on its own Web site in that country.

Late last month, Microsoft launched a Chinese language-based Web portal, MSN China, as a joint venture with Shanghai Alliance Investment. The project seems promising, and Michael Rawding, MSN's vice president for global sales, said at the launch of the Web site that as Chinese computer users become more technologically savvy, "their expectations on what they want to get done on the Internet becomes more and more meaty."

The problem, however, is Microsoft itself is imposing restrictions on what can or cannot be posted on the site -- namely its Web logs. Through MSN Spaces, which provides free blog access to users, Microsoft has made it easier for Chinese Internet users to post their own personal comments in cyberspace -- as long as they do not address subjects considered taboo by the Chinese authorities.

MSN bloggers are finding that words such as "freedom," "democracy," and "Taiwan independence" are banned from the blog site, and trying to post such words are met with a message that reads: "Prohibited language in text, please delete."

For its part, Microsoft defended its decision to play by the government's rule by stressing it not only has a Chinese partner, but it also operates in accordance to the laws of any country in which it operates -- including China.

A Microsoft spokeswoman told United Press International that "MSN Spaces in China is managed by its China joint venture the Shanghai MSN Network Communications Technology Company Ltd. MSN abides by the laws, regulations and norms of each country in which it operates."

The company did not provide further information on the ban, including which words were prohibited on its Web site.

Microsoft is not alone in cooperating with the Chinese government on censorship. Indeed, search engines Yahoo! of Sunnyvale, Calif., and Google of Mountain View, Calif., were the first major Internet content providers to agree to the authorities' restrictions in order to do business in the country.

Restricting free speech might go against the spirit of the Internet, but "in terms of business decisions, it seems to be an essential element of being over there," said Warren Sandmann, a professor at Minnesota State University Mankato's speech communication department.

Sandmann told UPI that "China is trying to have all the technology that the Internet provides with half the content... it's trying to use economic development of a technology and control the content of it."

As technology advances, it will be increasingly difficult for governments to block all Web sites that run against its wishes, Sandmann argued.

Meanwhile, advocacy groups too expressed their disappointment with Microsoft's latest business decision.

"It's appalling ... but it's not surprising," Mickey Speigel, senior researcher of the Asia division at Human Rights Watch in New York City told UPI.

Speigel said her organization had tried to get Yahoo! and Google to refuse to cooperate with the Chinese government to censor free speech, but the companies refused because of the business potential in the country.

"In the long run, there's no way to block information ... but there's still a long way to go" before the government is forced to accept the right to free expression, she added.

Still others are skeptical about the profits to be made by Microsoft in China, despite its willingness to abide by the country's laws.

Microsoft is "kowtowing to appease" the authorities, but it is not leading to increased sales, Usha Haley, a professor at the University of New Haven's school of business told UPI.

Haley argued that although its Windows program has nearly 60 percent of China's computer software market, 90 percent of its products are pirated so it has not led to any profits for the company, and added that the Web site was unlikely to boost revenue for the company, either.

Shihoko Goto is UPI's Senior Business Correspondent. E-mail: [email protected]