Friday 9 December 2016

Google China withdrawal may be permanent

Published 19/03/2010 | 11:54

A cleaning lady mops the floor inside the Google China headquarters building in Beijing on January 14. Photo: Getty Images
A cleaning lady mops the floor inside the Google China headquarters building in Beijing on January 14. Photo: Getty Images

Google would probably be unable to return to China should it withdraw from the market instead of abiding by the country’s censorship laws, a former executive at the company said.

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The public manner in which Google announced its intention to pull out of the country means they may have “burnt bridges and they’ve burnt the Google brand in China,” Peter Lui, formerly the company’s financial controller for the Asia Pacific region, said in an interview yesterday.

“There is no way Google can ever come back.”

Gabriel Stricker, a spokesman for Google, declined to comment, as did Jessica Powell, a spokeswoman in Tokyo.

The owner of the world’s most-used search engine on January 12 said it would stop filtering its website in China even if that meant ending its operations in the country.

Speculation that negotiations with the government had faltered intensified after China said last week the plan to stop filtering at its Google.cn site was irresponsible.

“China can do without Google. They have other search engines,” said Christopher Tang, professor of business at University of California. Google “will have a difficult time re-entering the China market,” he said.

The US company may announce on March 22 it will pull out of China on April 10, China Business News reported today, citing an unidentified Chinese sales agent and an unnamed Google official.

First employees

Lui, 45, said he was one of the first people at Google China and left the company in 2008 after three years because of disagreements with upper management.

Lui then joined online recruiter 51job Inc in March 2009 as chief financial officer before resigning eight months later.

Growing concerns that Google would pull out led some advertising agents to advise clients to promote their products in rival Internet sites such as those of leading Chinese search engine operator Baidu Inc.

China has 384 million Internet users, according to government data, more than the total US population.

The number may grow to 840 million, or 61pc of the population, by 2013, according to estimates at EMarketer Inc in New York.

Google rose $0.15 to $566.40 on the Nasdaq Stock Market yesterday. The shares have dropped 8.6pc this year.

The prospect of a pullout helped bolster shares of Baidu, China’s biggest Internet search engine, 46pc since the January 12 announcement.

All Internet service providers in China must have their licenses reviewed by the Ministry of Industry and Information Technology in March, though the agency may extend the reviews for some companies into April, Shawn Zhao, Google’s managing counsel for greater China, said earlier this week.

Google’s possible withdrawal would have no bearing on the overall environment for foreign companies operating in China and would be an “individual business act,” Chinese Foreign Ministry spokesman Qin Gang said this week.

“It’s over for Google in China,” Lui said.

Bloomberg

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