Google nixes China search site; Sales and R&D to stay

Google said it has redirected it's Chinese site to its uncensored Hong Kong site but will stay in China for sales and R&D purposes.
Written by Sam Diaz, Inactive

Special Report: Google-China

Updated: In a business and diplomatic showdown with China, Google has found a way to stop censoring its search results yet keep a presence in the country.

Google said Monday that it has stopped censoring its search services - Search, News and Images - on Google.cn, its site in China, and that users are now being redirected to Google.com.hk, its Hong Kong site, where it is "offering uncensored search in simplified Chinese, specifically designed for users in mainland China and delivered via our servers in Hong Kong."

It's unclear, however, how long any Web surfers in China will have access to uncensored results. And Google has already warned that increased traffic could result in a slowdown or even no access as the switchover occurs.

The company said in a blog post that making good on its promise to stop censoring search on Google.cn has been tough. In that post, the company explained that it sees the switch to the Hong King site as a legal way of increasing access to information for the people in China. However, the company noted that the Chinese government could block access at any time.

From the post:

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 non-negotiable legal requirement. We believe this new approach of providing uncensored search in simplified Chinese from Google.com.hk is a sensible solution to the challenges we've faced—it's entirely legal and will meaningfully increase access to information for people 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. We will therefore be carefully monitoring access issues, and have created this new web page, which we will update regularly each day, so that everyone can see which Google services are available in China.

It's not a full pull-out of China for Google, though. The company said it will continue R&D work in China and maintain a sales presence, though the size of the team would be depend on whether government officials allowed access to the Hong Kong site. It also stressed that all decisions about Google and China were those of executives in the U.S. and had nothing to do with employees of the company in China.

Also: Ed Burnette: Why Google should stay in China

Special Report: Google, China showdown

Analysts were handicapping Google's potential shutdown of the Google.cn site ahead of the announcement. Jefferies analyst Youssef Squali said that a full exit would have no short-term impact on Google's financial results. The long-term strategic hit, however, could hurt.

Squali said that China accounts for $250 million to $350 million, or 1 to 2 percent of Google's net revenue. In the long-run, China has the world's largest Internet user base at about 400 million.

Meanwhile, Squali added that China wasn't going to change its policies for Google. Overall, it's unclear whether China will allow Google.hk to be visible in the country.

For now, Google has a dashboard detailing its services in China---the list is subject to change.

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