Google Hopes to Retain Business Unit in China

Few people say they think Google’s Chinese-language search engine will survive the company’s confrontation with China.

But as Google prepares for talks with the Chinese government over its decision to stop cooperating with censorship laws there, the rest of Google’s business and operations in China hangs in the balance.

Google has said it is prepared to shut down its local Chinese-language search engine, Google.cn, unless it is allowed to run it uncensored. The company has also indicated that it would like to retain much of its operations there, including its growing ranks of Chinese engineers, its sales force and its toehold in the country’s mobile phone business.

If the company can reach an accommodation on these issues with Chinese authorities, the reward could be significant. Google would be able to claim a principled stand on free speech and human rights while suffering only marginal damage to its business in China.

Experts on China say that is not likely to be easy. The company’s public repudiation of censorship in China has put the authorities there in a position where a forceful rebuke of Google may be all but inevitable.

“The Chinese government is in a very difficult position,” said Xiao Qiang, director of the China Internet Project at the University of California, Berkeley. Mr. Qiang said that it would be hard for the Chinese government to be conciliatory without losing face. “They have never responded to a public challenge like this by not doing something,” he said.

What is more, there are indications that Google’s stand against Chinese censorship is already affecting some of the company’s business there. On Tuesday, Google said it would postpone the release in China of two mobile phones that are based on its Android operating system. The phones, made by Motorola and Samsung, and expected to run on China Unicom’s network, include many of Google’s mobile applications. Google asked its partners to postpone their release until the fate of its services in the country was settled.


Source : http://www.nytimes.com/2010/01/20/technology/companies/20revenue.html