Google may exit China

Internet search giant Google has said it will review its operations in China following a series of assaults by hackers on its computer systems.  The move, if followed through, would be a highly unusual rebuke of China by one of the largest technology companies in the world. Google launched its operations in China in 2006, keen to amass market share in a country with 350 million web users. However, the launch of the search engine there was on the basis of applying restrictions to search results that filtered out banned topics and images. It is common practice in China for major foreign companies to adapt their practices to Chinese rules on censorship. Google has linked its decision to review operations to attacks on its computer systems that it suspected originated in China and that were partly aimed at the Gmail user accounts of Chinese human rights activists. Google said it would try to negotiate a new arrangement to provide uncensored results on its search site, google.cn, otherwise it would cease to run the site and would consider shutting its offices in China, where it employs around 700 people and has an estimated $300 million in annual revenue. It is highly unlikely that China will come to any such agreement with Google, since it has an unwavering stance on censorship and the most comprehensive web filtering system in the world. A statement by David Drummond, GoogleÔÇÖs chief legal officer, said: ÔÇ£The decision to review our business operations in China has been incredibly hard, and we know that it will have potentially far-reaching consequences. ÔÇ£We want to make clear that this move was driven by our executives in the United States, without the knowledge or involvement of our employees in China who have worked incredibly hard to make Google.cn the success it is today. We are committed to working responsibly to resolve the very difficult issues raised.ÔÇØ GoogleÔÇÖs response to the security breach took the opposite stance to most major multinational companies, who consider China crucial to their growth prospects. Google leaving China would pave the way for other companies to enjoy an increased share in the search market. The market leader, Baidu, is a Chinese-run company that is closely linked to the government and complies with censorship laws. Baidu had around 64 percent of the market in the third quarter of 2009, compared with GoogleÔÇÖs 31 percent. It is estimated that Baidu could pick up around two-thirds of GoogleÔÇÖs revenue if the US company exits. Google has a much smaller share of the Chinese search market than it does in other major markets, commanding only about one in three searches. However, analysts believe that China will soon become one of the most lucrative markets in the world for internet and mobile services, with a withdrawal having the potential to significantly reduce GoogleÔÇÖs long-term growth. *┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á *