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Google closing the door on China?

Tuesday, March 16th, 2010

Google may make good on its threat to leave China should the most recent negotiations with the government fall through

Anyone who may listen to the “Week in Geek” show I do each Friday morning would be able to tell you how often I mention the words “China” and “Google” each time the show airs.  The ongoing battle between China and its censorship guidelines and Google with their ongoing frustration in dealing with China’s empirical choke hold on what information is allowed through the web giant’s site makes for soap opera type drama.  And while I may make light of the situation, it is quickly becoming anything but a laughing matter.

Google continues to hold its ground in talks with China in regards to filtering (read “censoring”) search results through the site.  Recent months have seen the clashes between Google and China reach the point where Google has determined that it may be best to pull out of the China market rather than continue to attempt to comply with the restrictions put in place by the Chinese government.  And recent days have seen activity that may suggest that Google plans to make good on the threat.

While the retreat of Google from China may not mean much of an impact to the coffers of the search company, several burgeoning industries in China may be negatively impacted should the pullout come to fruition.  The Android based phone business may not be completely shut down by a lack of a local Google presence but it is certain that the devices would be severely limited in their functions as China restricts access to sites external to the country.  In addition, China Mobile Ltd., the largest phone company in China and perhaps the world, relies on the search giant for mobile searches and maps.

Analysts have described the withdraw of Google from China as a “lose-lose” scenario as the country would not see another company move in to take Google’s place but rather a vacuum.  And at a 35% share of the search market is a sizable vacuum.

Spokespersons for Google have stated that the company remains in negotiations with China and would not confirm that they would be withdrawing should those negotiations fail.

Gritskrieg – End of Line