Google's threat jolts Chinese internet industry
submitted by markodonoghue on 13 January 2010
Google's threat to walk away from China has created a huge frenzy through the country's fast growing internet industry, with users, executives and analysts trying to gauge the potential fallout.
The search giant announced that it will stop censoring its Chinese search site and way withdraw from the country all together, caused massive concern and some anger among Chinese internet users. Students and others gathered at Google's offices in Beijing and Shanghai with flowers in an emotional show of support for the company, which analysts say has an audience of more than 40 million users in China.
"It's a tragedy if Google pulls out of China," said Xu Hao who is a junior studying Japanese at Tongji University in Shanghai. Wu Zhiwei is a sophomore studying philosophy at Fudan University in Shanghai, said "a lot of people are very angry at government censorship," and also said he understands that it contradicts Google's philosophies on free-Internet use.
Google's statement, which also said that the company had discovered massive cyber attacks against itself and numerous other foreign companies that it said emanated from China, jolted foreign businesses that operate in the country. It prompted quick response from human rights advocates, who praised Google's statement, and from U.S. Secretary of State Hillary Clinton, who said Google's allegations "raise very serious concerns and questions." "We look to the Chinese government for an explanation," Mrs. Clinton said on a visit to Hawaii. "The ability to operate with confidence in cyberspace is critical in a modern society and economy."
The Internet giant operates a Chinese-language search engine from Beijing that has similar functions to its international English-language Web site, but which tailors its search and other products like news and maps to the needs of users based in China. Because the Web site is operated locally, the company is required to abide by Chinese regulations, including requirements to filter its content and remove search results related to pornography and politically sensitive content, in order to stay in operation.
The Google statement was widely followed on China's Internet, and was initially treated as a major story by local Web sites. But China's official state media offered limited coverage of the issue, and news portals later in the day began restricting coverage of the story after being ordered to play down coverage of it, according to several people working for the portals. Several sites had translated and posted the full text of the statement by David Drummond, Google's chief legal officer, originally published in English on Google's blog, which is not accessible in China, but these translations appeared to have been removed soon after they were posted.
Some people are worried their Google e-mail accounts would be deleted, and others expressed concern that Chinese authorities would further tighten its Internet controls. "Our postings on the Internet are deleted by [other> Web sites, or when we upload pictures showing bad things on the street, they are deleted … I don't know what to do without Google," Ms. Xu said.
Google users "are all very active users of the Internet. They have high demand for the stability of Gmail, and also rely on it a lot in their daily lives," said Lu Bowang, managing partner with the China IntelliConsulting Corp. The firm estimates that 80 million people log on to Google at least once a week, and half are frequent users of the Web site. If Google leaves China, the impact on the Chinese Internet will be "huge," Mr. Lu said.
Chinese government officials have yet to respond to Google's declaration, and Chinese media were largely silent on the issue, with some reporters saying the topics of censorship and cyber espionage were too sensitive.
Analysts said some in the industry could stand to benefit from Google's departure. Baidu for example, could benefit if its main competitor vanishes, although it might risk a backlash if Chinese users are angry over Google's treatment, it could see Baidu as aligned with government censors.
Chinese Internet portals such as Netease.com Inc, Sohu.com Inc, and Tencent Holdings Ltd, all have their own search engines with market share, could also benefit. "If Google pulls out from the market completely, it will be a fight between Tencent, Netease and Sohu for the number two spot," said Elinor Leung who is an analyst at CLSA.
Submitted by:
Mark O'Donoghue
Associated Links:
http://online.wsj.com/article/SB10001424052748704362004575000440265987982.html?mod=WSJ_Tech_LEADSecond
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