Ad sellers set to file lawsuit against Google

08:40, November 09, 2010      

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Seven Chinese advertising resellers on Monday said they plan to file a lawsuit against Google Inc, the latest move outlining the strained relations between the US-based online giant and its former partners.

Fan Meiyong, a representative of the resellers, said they plan to sue certain Google China employees who they allege to have been involved in bribery and corruption.

"We believe they (certain employees of Google China) will be found guilty if we present the proof we have," Fan told China Daily on Monday.

His remarks came after the seven distributors said last Friday that their negotiations with Google China had broken down because the search engine decided to shut down all the advertisements they dealt with.

On Sunday, the distributors issued a public letter to Google founders Larry Page and Sergey Brin, calling for dialogue with the search engine's headquarters.

They also started a weeklong protest on Monday at Google's Shanghai office, in the hope of getting a response from executives, Fan said.

Google announced in late September that it would terminate contracts with seven advertising resellers in South China, without giving reasons for the move.

The announcement came after the search engine said it had cut ties with two Chinese advertising distributors in July. Many of the resellers affected have similarly gathered at Google's office in Shanghai in the past few weeks to protest the move.

Marsha Wang, spokeswoman for Google China, did not respond to an e-mailed enquiry from China Daily.

"The conflict will surely impact Google's performance in China," said Li Zhi, an analyst with domestic research firm Analysys International.

"It's not known yet whether Google can find other advertising agents to replace the seven, and its current partners may lose confidence because of the conflict, and in turn, affect Google's advertisers."

Google has seen its share of China's search market decline since it said it would redirect all the traffic from the Chinese mainland to its unfiltered Hong Kong server earlier this year. Google's share of the Chinese market fell to 21.6 percent in the third quarter from 24.2 percent previously, according to Analysys International.

Google's major Chinese rival Baidu Inc has been increasing its dominance, with its market share rising to 73 percent in the third quarter from 70 percent in the second.

Other players in China's search market, such as Inc and Alibaba Group Holding, have been stepping up efforts to grab more market share amid the changes. Sohu said it aims to take up 20 percent of China's online search market in the next three years, while Alibaba last month launched a beta version of its own search engine, Etao, to cash in on Google's exit from the mainland.

Source:China Daily


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