China extends Google's Net license

Internet giant gets license to operate for another year but observers note company's market share dwindling, although advertising dollars still flowing in.
Written by Tyler Thia, Contributor

China has renewed Google's Internet Content Provider (ICP) license, allowing the search giant to operate for another year, reports said Wednesday.

The renewed license also allows the company to expand its "limited suite" of services, reported Chinese news site ifeng.com. Google China was first awarded the ICP license in 2007, but the country's regulations dictate that the license must be renewed annually.

According to AFP, the Ministry of Industry and Information Technology named Google's China Web site operator, Beijing Guxiang Information Technology Co Ltd, as one of 137 firms that had their licenses renewed following adjustments in their operations.

The news agency added the ministry ordered the adjustments after some firms had changed shareholding structures without permission, provided services beyond their approved business range or had lax information security controls.

Analysts quoted by the Chinese media said with the license renewal, Google is likely to reinstate its China homepage, google.com.cn. The Chinese site currently only provides entertainment and product search functions, with search users directed to its Hong Kong search engine, google.com.hk. The Internet giant stopped its search operations in China in March 2010, after it accused the Chinese government of masterminding a cyberattack on the company.

Since its high-profile dispute with China early last year, the Internet firm has been involved in other skirmishes with the local government. Chinese authorities apparently blocked access to Gmail in March this year, and had also stopped netizens from visiting its new social networking platform, Google+, when it was launched in June.

Dwindling market share
Market observers say Google China now has little advantage in the local search engine market, as rivals such as Baidu and Sougou have stepped up efforts to gain a greater share of the pie when it exited the Chinese search market last year.

ifeng.com reported that Google's domestic search engine market share dropped from 39 percent in the fourth quarter of 2009 to just 11 percent a year later, while Web research site CNZZ.com put the figure at just 8 percent. Baidu leads the market with a share of nearly 84 percent.

However, market watchers are confident that its user-friendly advertising arm, Adsense and Adwords, may attract more traffic and help boost Google earnings in China, where the number of Web users is estimated to be over 485 million. Chinese advertisers who wish "to reach prospects abroad" have been advertising with Google, said IDG news.

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