Google hits exit key (2)

08:49, March 24, 2010      

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Above: A Google China employee uses a mobile phone to take photos of the crowds outside the company's headquarters in Beijing on Tuesday. Google Inc shut its mainland portal and began rerouting searches to its Hong Kong site, prompting concerns over its future business in China. Below: A worker walks through the lobby of Google's headquarters in Hong Kong on Tuesday. Top: Jason Lee / Reuters; Edmond Tang/China Daily

However, just hours later, Foreign Ministry spokesman Qin Gang told a regular press briefing that the government would handle the case "according to law", and that the move was an isolated act by a commercial company and should not affect China-US ties "unless politicized".

Philip Crowley, a US State Department spokesman, said on Monday it was "a decision for Google to make".

It is unclear whether the move will go on to impact bilateral ties, while uncertainty also remains on whether Google's revenue, and that of its Chinese partners, will be affected.

TOM Online, a mainland Internet company run by one of Asia's richest men, said on Tuesday it has ended its affiliation with Google Inc, after "the expiry of their agreement".

"TOM reiterated that as a Chinese company, we adhere to rules and regulations in China where we operate our businesses," said a statement by its parent company, Hong Kong-based TOM Group, which is controlled by Hong Kong tycoon Li Ka-shing. The company declined to say when it stopped using Google services or to provide any details

of its agreement with Google. Many of Google's other Chinese partners, such as free music service Orca Digital, insisted the redirecting of Google.cn and Google.com traffic to its Hong Kong website will have little impact on their partnerships.

"Google.cn is only one gateway so it doesn't have a significantly impact to us," said Orca chief executive, Gary Chen, whose firm has received investment from Chinese basketball star Yao Ming. He said his company may keep its partnership with Google through its global website and believes the Chinese government would not oppose that. "I believe they can still find a solution," he said.

Orca generated 5 million yuan ($730,000) in the fourth quarter of 2009 - most of which came through Google's advertising platform - and Chen said he expects that figure to double this year despite Google's closure of its China-based operations.

About 40 percent of Google China's revenue is generated through its global advertising network, which would not be impacted by the shutdown of Google.cn, according to Edward Yu, president of China-based market research firm Analysys International.


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