A short-lived two-year partnership between MSN and Shanghai Alliance Investment today has come to and end. The Chinese partner apparently cites discomfort with Microsoft’s revenue model, and bashes the company’s reliance on mobile operators.

Alliance Investment has been actively looking for a buyer of its share since mid-2007, according to the 21st Century Business Herald. A source close to the situation told the paper that Alliance Investment wanted to make the sale due to its worries that MSN China had failed to find a clear revenue model, though Alliance Investment may give up on its exit plan if it fails to get a good price for its stake.

All may sound reasonable but let’s not forget the user base that Microsoft owns in China. Sure, MS might not have the most popular mobile IM service (QQ is leading the pack), but they definetely have the majority registered on their msn spaces, windows messenger, email, etc… Besides, which international company is making money in China on advertisement right now? Yahoo? Google? All of them have yet to develop an appealing case for businesses. Alimam might be one but by the time they go mainstream, there just might be already plenty of competition from Sohu, Baidu and Sina.

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Filed under: Reports - China, Internet Development, Globalization