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By MICHAEL LIEDTKE and JESSICA MINTZ, AP Technology Writers Michael Liedtke And
Jessica Mintz, Ap Technology Writers Mon Mar 22, 8:36 pm ET
SAN FRANCISCO Google Inc. stopped censoring the Internet for China by
shifting its search engine off the mainland Monday but said it will maintain
other operations in the country. The maneuver attempts to balance Google's
disdain for China's Internet rules with the company's desire to profit from an
explosively growing market.
Google's decision comes after an impasse pitting the world's most powerful
Internet company against the government of the world's most populous country.
It's still not clear if Google's solution will resolve a standoff that began
Jan. 12. That's when Google said it would no longer adhere to China's
requirement that it omit some Internet results.
Visitors to Google's old service for China, Google.cn, are now being redirected
to the Chinese-language service based in Hong Kong, where Google does not
censor the search results. The Hong Kong page heralded the shift Monday with
this announcement: "Welcome to Google Search in China's new home." The site
also began displaying search results in the simplified Chinese characters that
are used in mainland China.
However, the results can't all be accessed inside China, because government
filters restrict the links that can be clicked by mainland audiences.
Google plans to retain its engineering and sales offices in China so it can
keep a technological toehold in the country and continue to sell ads for the
Chinese-language version of its search engine in the U.S. The company, based in
Mountain View, also intends to keep its mapping and music services on
Google.cn.
But the revolt against censorship threatens to crimp Google's growth,
particularly if China retaliates by making it more difficult for the company to
do business in the country. The Chinese government could react by blocking
access to Google's services, much as it has completely shut off Facebook,
Twitter and YouTube, which is owned by Google.
In remarks carried by Chinese state media, an unnamed official with the
government's State Council Information Office said Beijing is "uncompromisingly
opposed" to Google's move.
"This is totally wrong," the official told the official Xinhua News Agency.
The tensions in China already have prompted Google to delay plans to sell some
new wireless phones running on its mobile software in the country. A store
offering mobile phone applications for the Android software system also remains
on hold.
"Figuring out how to make good on our promise to stop censoring search on
Google.cn has been hard," David Drummond, Google's top lawyer, wrote in a
Monday blog posting. "We want as many people in the world as possible to have
access to our services, including users in mainland China, yet the Chinese
government has been crystal clear throughout our discussions that
self-censorship is a nonnegotiable legal requirement."
In a way, Monday's change harks back to how Google operated in China before
2006. Back then Chinese users could search through Google sites such as
Google.com, although filters inside China kept people there from clicking
through to links generated by queries such as "Tiananmen Square massacre."
Google tried to better reach Web users in China by setting up Google.cn, whose
results would be tailored for them. That meant complying with rules requiring
the omission of search results the government deemed subversive or
pornographic. Google's pages for China noted that some results had been
excluded. But the complicity sparked criticism by Google supporters, including
some of its own employees, who believed the company was violating its "Don't Be
Evil" motto.
On Jan. 12, the search company vowed to shake loose from government-imposed
restraints on the Internet. It said it was no longer comfortable playing by the
rules after it determined that Google and more than 20 other U.S. companies had
been targeted in computer hacking attacks originating from China. The attackers
also tried to pry into the e-mail of human rights activists, according to
Google. That raised the specter that the Chinese government played a role in
the espionage, although Google never made a direct accusation.
Even so, Google had hoped to persuade China to let it run a search engine that
could deliver unrestricted results. Failing that, Google wanted to find enough
common ground to maintain its research center and sales team in the country.
Drummond said Google might pull some of its sales force out of China if the
government blocks access to the Hong Kong search engine entirely. About 700 of
Google's 20,000 employees are in China.
"We very much hope that the Chinese government respects our decision, though we
are well aware that it could at any time block access to our services,"
Drummond wrote. Google said he was unavailable to elaborate.
Although Hong Kong is part of China, the former British colony was granted a
degree of autonomy when it returned to Chinese rule 13 years ago. Its legal and
political freedoms were largely preserved. That has made Hong Kong an appealing
home base for companies operating in mainland China, which has troubled
Beijing, said Nicholas Bequelin, Human Rights Watch's senior Asia researcher.
"China may also read this as a challenge to its sovereignty of Hong Kong,"
Bequelin said. Google's move "is probably going to put the heat on the Hong
Kong authorities, (whose) leadership is hand-picked by Beijing."
The friction with Google also could affect China's relationship with the Obama
administration, which has joined in the call for Internet censorship. China's
officials have responded indignantly, insisting all companies must obey the
country's laws and accused Google of coordinating its protest with the U.S.
government.
A spokesman for the White House's National Security Council, Mike Hammer,
expressed disappointment that Google and China weren't able to work out their
differences.
"The U.S.-China relationship is mature enough to sustain differences and while
we seek to expand cooperation on issues of mutual interest with China, we will
candidly and frankly address areas of disagreement," Hammer said.
Many analysts believed China didn't want to lose Google completely, possibly
because it might be interpreted as a setback in the government's efforts to
foster innovation. Some Web surfers in China also fretted about the possible
loss of Google, even going so far as to place flowers outside the company's
offices.
For its part, Google wanted to stay in China so it could keep hiring computer
programmers and peddling ads in the country. Google also believes its presence
in China could lead to looser rules on censorship.
China accounted for a small fraction of Google's $24 billion in annual revenue.
Analysts estimate Google brought in $250 million to $600 million from China.
It's unclear how much of that amount flowed exclusively from Google.cn.
Investment analysts have been more worried about the long-term consequences of
Google's actions in China. Opportunities there figure to grow faster than in
the U.S. or Europe. Even if Google remained a distant second in search behind
the homegrown Baidu.com Inc. in China, Google could still prosper as more
Internet ads are served up in the country.
Google shares have slipped 5 percent since its Jan. 12 warning about a possible
shutdown in China. The technology-driven Nasdaq index has climbed about 5
percent during the same span. Google shares fell slightly after the
announcement and closed Monday at $557.50, down $2.50 for the day. Baidu's U.S.
shares, which have soared about 50 percent since Google raised the possibility
of leaving China, closed Monday at $579.72, up 1.8 percent.
China's financial promise is the main reason other technology companies,
including Microsoft Corp., seem intent on staying there. If Google exited the
country completely, Microsoft and other technology companies might have had an
easier time recruiting China's best engineers.
The director of the China Internet Project at the University of California,
Berkeley, applauded Google for its stand but predicted China will look for ways
to undercut the company.
"The Chinese government will respond in their typically heavy-handed way," said
Xiao Qiang, director of the project. "It's inevitable."
___
Jessica Mintz reported from Seattle. Associated Press Writer Charles Hutzler in
Beijing contributed to this report.