The standoff between Google Inc. (NASDAQ.GOOG) and China over Internet censorship continued till Thursday despite the Internet search engine giant showing eagerness to “abide” by Chinese laws. However, with the mainland government not reacting favourably, Google is in danger of losing its Internet Content Provider (ICP) license in China.
Google said on Monday it had stopped redirecting mainland Chinese users to an unfiltered site in Hong Kong, hoping that the mainland government will renew its ICP license in China that was up for renewal on Wednesday.
Google said the “new approach is consistent with our commitment not to self-censor and, we believe, with local law” and hoped that its move will pacify the communist regime.
Without the license, Google said it would “effectively go dark in China.”
However, it seems that the mainland government still hasn’t relented and Google said, Thursday, that a search engine feature continues to be blocked in Google.cn.
Mainland users, Google said, could not use its “suggest” feature, which offers possible results as they start to type a query.
According to Google spokeswoman Jessica Powell, “Normal searches that do not use query suggestions are unaffected.”
Other key services such as Gmail, News and Images were “fully or mostly accessible.”
However, the mainland government said they were unaware of the development but added that all foreign companies should abide by local laws.
Foreign Ministry spokesman Qin Gang said all Internet operators in China, including Google, “should abide by Chinese laws and regulations.”
State-run media were also critical of Google. State-run news agency Xinhua said Google’s submission for renewal of ICP was very late. But it added that Google should expect a “result soon.”
People’s Daily, the ruling Communist Party’s mouthpiece, slammed Google saying that it was “two faced” in its handling of the censorship issue.
Google, it said was “trying to score political points in the West while benefiting from China’s economy.”
The latest development shows that the Communist mainland government is still not happy with the new steps Google has taken and it could ask for more before it approves renewal of Google’s ICP license.
Google and the mainland government locked horns in January when Google threatened to shut down its operations in mainland China after complaining of cyber attacks that originated from the state. Google said the cyber attacks had targeted the Gmail accounts of Chinese dissidents. The company also said it would not abide by the so-called “Great Firewall of China” that limits Chinese Internet users’ access to information on topics ranging from Tibet’s independence to the 1989 crackdown on democracy protesters in Tiananmen Square.
Two months later, in March, Google began redirecting users of Google.cn to its uncensored Hong Kong site Google.com.hk.
However, Beijing reacted furiously, denying any role in the cyber attacks. It also said Google was “totally wrong” to stop filtering Google.cn as state censorship is not new. The 57th statement in China’s regulations concerning telecommunications prohibits any organization or individual from using the Internet to spread any content that attempts to subvert state power, undermine national security, infringe on national reputation and interests, or that incites ethnic hatred and secession, transmits pornography and violence.
The government also said it was “unacceptable” that Google was rerouting Chinese users to the unfiltered Hong Kong site. The government also laid down regulations concerning online mapping services and the State Bureau of Surveying and Mapping had released a list naming 23 local companies, including Baidu, Sohu and Alibaba, to be granted a license to provide the online mapping services. Google’s name was conspicuously missing in the list.
The standoff between the two parties seemed to end Monday when Google said it would stop rerouting Chinese users to the Hong Kong site. It said it has put up a link of the Hong Kong site on Google.cn and now users will have to manually click on the link to access the unfiltered site.
Google took the step as its standoff with the mainland government was hurting its revenue.
China boasts of the world’s largest online population – 404 million – and a strong presence in China would benefit Google’s business in terms of revenues. JPMorgan Chase & Co. estimated in January that Google would have generated $600 million in annual sales in China this year.
A strong Chinese presence would also ensure that Google continues to lead the global search engine rankings. Google, in China, competes with bigger local rival Baidu. According to data from research firm Analysys International, Baidu became the biggest beneficiary in China’s search sector following Google’s problems in the country. Google’s market share in China had fallen 30.9 percent in the first quarter (Jan-March) from 35.6 percent three months earlier. In comparison, Baidu’s share had increased to 64 percent from 58.4 percent.
“If traffic is hurt, then advertisers will panic and cut spending,” Analysys International’s president Edward Yu had said.
However, the analysts wondered whether Google’s move will appease the mainland government. According to Danny Sullivan, who runs the search-analysis Web site Search Engine Land, it’s doubtful if the Chinese government will be “any happier just because it (the uncensored Hong Kong site) becomes one click away.”
According to Analysys International’s Yu, all that Google can do now is “wait for the process.”
“So far we think it is a negative blow to Google China,” Yu said.
It seems Yu is correct. All that Google can do now is obey the diktats of the mainland government or else “go dark in China.”
Shares of the Mountain View, California-based Google were flat at $446 during pre-market trading on the Nasdaq on Thursday.