Google and China work out Good Enough solution

Daylife/Reuters Pictures used by permission

Google said China has given it permission to continue operating its Chinese search page, resolving a censorship dispute that had threatened Google’s future in the world’s biggest Internet market.

The news sent Google shares up 2 percent as it eased immediate concerns that Beijing would kick the company out for taking a hard stance against Web censorship…

Google had embarrassed China in January by drawing global attention to Beijing’s Web censorship practices and by accusing hackers in the country of launching a sophisticated cyber attack on Google and other major U.S. companies…

Last week, Google offered Beijing a face-saving compromise: it stopped automatically rerouting the page to an uncensored Hong Kong-based search page. Instead, visitors to have to click once to go to the Hong Kong page.

“China has renewed our license,” a Google spokeswoman told Reuters. “We are very pleased that the government has renewed our ICP (Internet Content Provider) license and we look forward to continuing to provide Web search and local products to our users in China.”

Analysts estimate Google’s revenue in China to be in the range of $300 million to roughly $600 million, a [small] slice of the firm’s $24 billion in annual revenue.

But China’s long-term growth prospects are key for Google. With nearly 400 million users, China only has an Internet penetration rate of 25 percent with huge market opportunities in search, e-commerce and online gaming, analysts say.

Google has around 30 percent market share of China’s 7 billion yuan ($1 billion) search market, a distant second to the dominant local player, Baidu. Shares of Baidu, which have soared about 75 percent since Google’s China problems emerged in January, fell 2.7 percent on Friday.

The last paragraph may be a bit misleading. The part about soaring 75%. There were other marketing moves kicking in – and Baidu also did a 10:1 stock split in the same timeframe that kicked up their share price, as well.

From my personal point of view, staying in the market, staying in China and competing for the attention of netizens is smarter, economically and politically, than taking your marbles home in a snit.

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