tvwithflag.jpgIn a puzzling move for the world's biggest software company, Microsoft has paid 94m yuan for a small stake in China's second largest TV manufacturer, Sichuan Changhong Electric Company.

The two companies also signed a memorandum of understanding for a project called Media Galaxy, through which they will cooperate on R&D and production of digital entertainment products linking televisions and PCs with the internet, Changhong Electric said in a statement.

Despite the usual talk about cooperation and “strategic stakes”, the synergies are not immediately apparent in this deal. If Microsoft wanted to get into bed with a low-cost hardware manufacturer to cooperate in some ambitious new home entertainment initiative, presumably it would have invested a lot more in the deal.

It may still do so in the future, but at the moment the investment seems inconsequential particularly given the huge amount of money that Microsoft has spent over the years in a largely unsuccessful bid to make an impression in the home entertainment market.

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