Dr. Kai-Fu Lee, corporate vice president of Microsoft has offered resignation and will serve as Google's Vice President, Engineering and President of Google China. The news made Google's stock rose 3.46 percent ($10.36) and closed at $309.9, setting a new high.

The appointment of Dr. Lee as president of Google China is striking news to the industry. Many personalities in the Chinese Internet industry have been considered as candidates for the first president of Google China. Google's hiring of Dr. Lee as head of its China operations under enormous legal risks demonstrates its ambitiousness for the Chinese market.

Dr. Lee, who will depart for Beijing to take office on July 23, will have to face Microsoft's lawsuit. On July 20, Microsoft filed lawsuit against Kai-Fu Lee and Google in Washington State Superior Court in King County, accusing Lee of breaking non-compete agreement and Google of wooing Lee away.

In its statement dated July 20, Microsoft said, "creating intellectual property is the essence of what we do at Microsoft, and we have a responsibility to our employees and our shareholders to protect our intellectual property. As a senior executive, Dr. Lee has direct knowledge of Microsoft's trade secrets concerning search technologies and China business strategies. He has accepted a position focused on the same set of technologies and strategies for a direct competitor in egregious violation of his explicit contractual obligations."

On the same day Google fought back with a statement saying: "We have reviewed Microsoft's claims and they are completely without merit. Google is focused on building the best place in the world for great innovators to work. We're thrilled to have Dr. Lee on board at Google. We will defend vigorously against these meritless claims."

"It has always been my goal to make advanced technologies accessible and useful to every user, as well as to be part of the vibrant growth and innovation in China today," said Dr. Kai-Fu Lee in a statement. "Joining Google uniquely enables me to pursue both of my passions and I look forward to returning to China to begin this exciting endeavor."

Google has not begun operations in China although it is widely known amongst Chinese users. In 2005, Google finally announced it will enter the Chinese market. At the beginning a rumor said a team from Google has secretly arrived in Shanghai; then it is said Google intended to work with Baidu to launch advertisement search in China. After refused by Baidu, it announced to abandon the direct sales mode applied in the US and turn to seeking a general agent in China. It is said Shanghai Huosu Internet Information Technology Co., Ltd has been selected to act as its agent for advertisement business in China. But when a reporter called G.M. of Shanghai Huosu Liu Xiaoguang, he replied, "This is just a rumor."

Analysts say Microsoft has lost lots of points no matter how the event develops. Kai-Fu Lee's leave has dealt a heavy blow to Microsoft mentally; by contrast Google not only shows its ambitiousness in Chinese market, but will also probably get expanded in some fields of new technologies.

By People's Daily Online