China without Google: ‘a lose-lose scenario’(2)
Google hopes to keep operating its Beijing research and development center, advertising sales offices and mobile phone business, according to a person familiar with the company’s thinking. But the person said the company won’t do that if it believes its decision to stop censoring search results will jeopardize employees in China. Industry analysts estimate Google has a work force of 700 in China.
The government says Chinese mobile phone carriers will be allowed to use Google’s Android operating system but there has been no word on whether efforts to sell its own phones in China might be affected. Google postponed the launch of two phones with a major Chinese carrier due to the dispute.
Uncertainty also surrounds Google’s China music portal, a free, advertising-supported service launched last year in partnership with four global music Replica Louis Vuitton companies and 14 independent labels. Industry analysts say it has helped to undercut China’s rampant music piracy by offering an alternative to unlicensed copying.
“Without that, are we back to, `Piracy wins’?” said Duncan Clark, managing director of BDA China Ltd., a technology market research firm.
The music service is run by Top100.cn, a company part-owned by Google, but can be accessed only through Google.cn. Top100.cn’s executive chairman, Erik Zhang, said it is preparing for the possibility that Google.cn might close but said his company has not been told whether that will happen. He declined to give other details.
The biggest impact of a Google departure could lie behind the scenes, where Chinese companies, many of them small entrepreneurs, rely on its AdWords advertising service, Gmail e-mail and documents services.
Those might be disrupted if Beijing turns up Internet filters to block access to Google’s sites abroad. Its U.S. site has a Chinese-language search engine but is already inaccessible due to government filters.
In an uncomfortable irony for Beijing, Google might suffer little commercial loss from a pullout while China’s own companies are hurt.
The bulk of Google’s estimated $300 million in 2009 revenues in China came from export-oriented companies that would need to keep advertising on its sites abroad zhjchv0317 even if Google.cn closes, according to Yu.
“We believe the majority of revenue would still be kept on, with keyword purchases listed on Google.com instead of Google.cn,” he said.
The loss of competitive pressure from Google also might slow Chinese development in search and other Internet services, Yu said.
“This is definitely a bad thing for Chinese companies that want to go abroad in the future,” he said.
The industry minister, Li Yizhong, said Friday that China’s Internet industry would develop without Google. But even some Chinese industry leaders who Omega replica Watches normally toe the government line in public are warning that controls on Internet companies and media are handicapping their growth.
Beijing has steadily tightened controls over Internet content and foreign investment in the industry. Video sharing sites must have state-owned media outlets as partners. People in the industry say it is getting harder to register privately financed sites.
“Without full and fair market competition, there will be no quality, no excellence, no employment opportunities, no stability and no real rise of China,” said the chairman of major Chinese portal Sohu Inc., Charles Zhang, in a speech in February, according to a report on Sohu’s Web site.
“How do we do this practically?” Zhang said. “The problem is complicated, but the fundamental point is to limit the power of the government.”