Because in the end, market share produces revenue. Now that you have
the OS, you need apps (Office), services (Windows Live), mice and
keyboards, dev tools (Visual Studio), drivers, peripherals, and on and on.
Besides, we are talking about China here. They are not going to buy it
anyways. It's better to have them use *your* product for free instead
of not at all, at the expense of the *other* product's market share.
If you are Microsoft, which would you rather have - a billion Chinese
using (free) Windows (and all associated
apps/drivers/peripherals/support/services) or a billion Chinese using
(free) Linux? The short term loss produces big gains in the long term,
and also just happens to have the side benefit of hurting your
competition. Which itself is a *huge* gain!
Stop thinking short term. Even if China never sends one dollar to
Microsoft, the gain is in not having Linux get a billion new users.
Which would mean lots of new apps/drivers/peripherals/support/services
for Linux. Which makes Linux more attractive in places where Microsoft
has paying customers.
Again, market share is *everything*.
Mike