March 19 (Bloomberg) -- Google Inc. may pull out of China on April 10, China Business News reported today, citing an unidentified Chinese sales agent for the company.
The search engine may announce its exit on March 22, the Shanghai-based newspaper reported, citing an unidentified Google China employee. It may also reveal plans for its China staff on the same day, according to the report.
Google hasn’t confirmed the April 10 date for its pullout, the newspaper cited the sales agent as saying. Tokyo-based spokeswoman for the company, Jessica Powell, declined to comment on the report.
Google challenged the government of the world’s most- populous country in January by threatening to allow all search results to be shown on its Chinese-language Web, including references to Tibet and the 1989 Tiananmen Square crackdown. The two sides have since been in talks to resolve the issue.
The Mountain View, California-based company said it decided to stop censoring content after discovering its computers had been hacked from within China. Google said its systems had been targeted by highly sophisticated attacks aimed at obtaining proprietary information, as well as personal data belonging to Chinese human rights activists who use the company’s Gmail e- mail service.
The attacks Google reported employed skills that were “much greater than most enterprises are equipped to deal with,” according to security research firm ISEC Partners Inc. At least 20 other international companies in technology, finance and chemicals were similarly targeted, Google said at the time.
Speculation
Speculation that negotiations had faltered intensified after the government said last week the plan to stop filtering at its Google.cn site was irresponsible. Some of Google’s advertisers in China have been advised to switch to rivals including Baidu Inc.
China censors online content it deems critical of the government by shutting down Web sites based in the nation and blocking access to overseas sites including those of Facebook Inc., Twitter Inc. and Google’s YouTube. Authorities also censor media through state ownership of all newspapers, television and radio stations.
The Chinese service started by Google in 2006 limits search results to comply with government restrictions, such as blocking access to sites that discuss Taiwan or Tibetan independence, the outlawed Falun Gong and the Tiananmen Square military crackdown on pro-democracy protesters.
The prospect of a Google pullout sent ripples through the market, with Baidu’s shares climbing 46 percent since the Jan. 12 announcement. Google has lost 4.1 percent in the same period.
China Sales
Google earned sales of 2.27 billion yuan ($333 million), from China in 2009, according to Analysys International
China has 384 million Internet users, according to government data. That’s more than the total U.S. population, and EMarketer Inc. in New York said the number may grow to 840 million, or 61 percent of the population, by 2013.
Baidu, China’s biggest Internet search engine, will pick up “the lion’s share” of Google’s search business should the U.S. company leave, Nomura Holdings Inc. analyst Jin Yoon wrote in a Jan. 13 report. Tencent Holdings Ltd., operator of China’s biggest online chat service, and Sohu.com Inc. also will gain, Yoon said.
U.S. Secretary of State Hillary Clinton said Jan. 21 that U.S. technology companies should resist censorship of the Internet, and the perpetrators of cyber attacks such as those against Google must face the consequences.
China said it opposed Clinton’s comments, which caused damage to Sino-U.S. relations, Foreign Ministry Spokesman Ma Zhaoxu said on Jan. 22. The Chinese government has said it doesn’t engage in cyber attacks and is itself a victim of breaches of Internet security.
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