Weekly Wrap-up: Microsoft will keep its strategy in China, while Microsoft CEO envisions a cloud based IT future.

Microsoft said it will stick to its development strategy in the China's search market despite Google spat.

Microsoft is keeping a relatively low profile in China since the high-profile spat between Google and Beijing, after search giant announced its decision to potentially withdraw from the market over censorship issues and following an attack on its systems that it believes came from China.

Microsoft CEO Steve Ballmer previously said his company had no plans to pull out of China, indicating it was unlikely to follow Google's lead in challenging a Chinese system that forces Internet firms to self censor their sites on sensitive topics.

"Regardless of whether or not Google stays, we will aggressively promote our search and cloud computing," Zhang Yaqin, chairman of Microsoft's Asia-Pacific R&D Group, told in its interview to Reuters. He also added that Microsoft plans to spend about $500 million on research and development in China this year, and another $150 million on outsourced projects.

Microsoft CEO Steve Ballmer has met with computer students to discuss the future of computing cloud.

Mr. Ballmer emphasized the importance of hosted computing services for the future revealing company's plans to increase its cloud workforce by 20%. At this time 70% of 40,000 Microsoft employees who work on software are in some way focus on cloud.

According to Ballmer all Microsoft products are driven by the idea of being connected to the cloud and while some of its latest product still consist of not-cloud based work, the inspiration for the product starts with the cloud.

Admitting company's historical mistakes in mobile market Microsoft CEO described different strategies for creating devices that connect to cloud-based services. "The cloud wants smarter devices," he said.

Microsoft is open in its cloud initiatives and wants to help foster the development of different cloud-computing services for both private and public. In some cases the company will help organizations to run their hosted environments through Azure cloud services and products allowing to independently implement cloud environments.

The potential benefits of cloud computing will be crucial for research and science industries. "We need to speed up the rate of scientific innovation" that can help solve climate change issues before that happens, he said. With cloud computing researches will be able to run experiments more quickly and analyze more data. It will be critical in future projects in researches.

There will be whole new opportunities for businesses too. Microsoft CEO predicted that the new infrastructure will create new business models and bring massive investments to IT. Businesses can bring their products to market without significant up-front investments in data-centers.

Weekly Wrap-up: Although, Microsoft's Courier tablet didn't show up at CES, some others did.

Despite numerous rumors about presentation of new multimedia tablet from Microsoft and HP, which concept Microsoft unveiled last September, the device didn't appeared at this year's International Consumer Electronic Show. Instead, Microsoft showed off three tablet computers running the touch-enabled Windows 7. The tablets were built by Asus spinoff Pegatron, media player maker Archos and HP itself. According to CEO of Microsoft Steve Balmer those three devices are almost as portable as a phone, but running Windows 7.

HP in turn said its slate computer will ship this year, part of a growing group of its new touch-enabled computers. HP also agreed to install Bing as the default search engine, and MSN the default home page, on HP computers in 42 countries.This alliance could help Bing to win more new users.

While Bing has already added 11 million new users since its launch last June, Microsoft's another hit on its way to set records. Mr. Balmer talked up Windows 7 during his speech at CES and contended that it's been a boon to the PC market. Retailers sold 63% more PCs this Black Friday compared to 2008. Windows PC sales in North America were 50% higher year-over-year, according to NPD Group. Ballmer credited at least part of the improved sales totals to the 800,000 new apps and 240,000 new peripherals created for Windows 7.

CEO of Microsoft don't forget to pay attention to one of Microsoft's touchiest subjects, its long-laming Windows Mobile OS. He promised that Microsoft would preview Windows Mobile 7 at the upcoming Mobile World Congress in February. Previously reported an actual launch next month, based on seems unlikely.