Google about to close China offices

15 Mar 2010

It is increasingly likely that Google will shutter its Chinese-language search engine in the aftermath of spying and hacking allegations that emerged in recent months. Chinese rival Baidu’s shares have jumped as a result.

China has denied any role in the attacks on the computers of 20 US businesses and Chinese human rights activists, which prompted Google to threaten to close its Chinese search engine.

In January, Google’s chief legal officer David Drummond revealed that Google and a number of other companies based in China were hacked and that hackers attempted to access the Gmail accounts of notable civil rights activists.

The controversy has been simmering ever since but now it is increasingly likely Google will exit the massive Chinese market.

Baidu shares triple over year

US depositary shares in rival firm Baidu jumped on the news. Baidu climbed 3.2pc to $567.55, more than tripling over the past 12 months.

According to web analytics company StatCounter, at the end of 2009, Baidu held 56pc of the Chinese market compared to Google’s 43pc.

In recent months, Baidu has been deploying a new advertising system it has dubbed Phoenix Nest.

Talks between Google and the Chinese government are understood to be ongoing but reports suggest little is materialising. Google is adamant it will not accept self-censorship.

It is expected that Google’s pull out from China could happen in the next few weeks.

By John Kennedy

Photo: Internet search giant Google may pull out of China in a few weeks, after Google said not only was it hacked, but so were the Gmail accounts of civil rights activists

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years