Monday, 12 July 2010

Google remains at risk in China

China’s government confirmed that it renewed Google Inc’s Internet license, after the US company’s local venture pledged to allow its Web content to be supervised by regulators, the official Xinhua news agency said.

Beijing Guxiang Information Technology Co, operator of Google’s China website, has undertaken to comply with Chinese law and provide no law-breaking content, Xinhua reported, citing an unidentified official at the Ministry of Industry and Information Technology.

Getting the go-ahead gives Google, which disclosed China’s decision to renew its license last week, a chance to win search share lost to market leader Baidu Inc and woo advertisers put off by the company’s half-year dispute with the government. Some Google operations were in jeopardy as it balked at censorship rules that require companies to filter Web content.

Google was surprised by how quickly China renewed the company’s Internet-services license, Chief Executive Officer Eric Schmidt said in a July 9 interview. There were no formal negotiations between Google and Chinese officials over the decision, a person familiar with the matter said.

China renewed the license through 2012, and officials will revisit the decision annually. China’s government can still use its authority to yank the license if it deems Google’s compliance wanting, said Sandeep Aggarwal, an analyst at Caris & Co. in San Francisco.

‘At risk’
“Google remains at risk in China,” Aggarwal said. “Chinese regulators gave them a back door.”

Google, owner of the world’s most popular search engine, went public with its dispute in January, saying it was no longer willing to comply with China’s filtering regulations.

“We look forward to continuing to provide Web search and local products to our users in China,” the company said on its July 9 blog. Spokeswoman Jessica Powell declined to say whether China had imposed any conditions on renewing the permit.

Google, based in Mountain View, California, won approval after changing the way it handled search requests. After closing its Chinese search engine in March, it had been automatically redirecting users to its unfiltered site in Hong Kong. To allay officials’ concerns, Google added an extra hurdle for Chinese Web surfers, directing them to a landing page that in turn pointed them to the Hong Kong site.