Microsoft Corp will invest about $100 million annually over the next three to five years in China, the world's second largest Internet market with 111 million users, state press reported.

The U.S. software giant established a new research group in Beijing to integrate its online MSN division, technical support and research centers, the paper said.

The Internet is the focus of the total investment as we cannot neglect the booming Internet population in China, Zhang Yaqin, a Microsoft vice president, told the newspaper.