Simon Leung, the company's CEO for greater China, told The Wall Street Journal that Microsoft plans to invest $100 million in Chinese companies, targeting sectors including software and cloud computing.
Leung did not give details on the search for a Chinese partner. Microsoft's Bing search engine currently has less than 4.2% of country's Internet-search market by revenue. Google (GOOG) has 24.2%, while Baidu Inc dominates with 70%.
"Definitely, our goal is to be No. 1 in the market" as measured by the amount of searches handled, Leung told The Wall Street Journal.
Microsoft is also seeking regulatory approval to sell its Xbox gaming console in China, Leung said.