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Google Says China Partially Blocks Search Service

JOE McDONALD   07/ 1/10 04:55 PM ET   AP

Google China

BEIJING — A Google search feature was blocked in China on Thursday, the company said as it awaited Beijing's decision on whether to renew its operating license amid tensions over censorship.

Google Inc. said mainland users were unable to use the search giant's "suggest" feature, which offers possible results as they start to type a query. When it works, the feature may offer Chinese users a reminder that "tiananmen square massacre pictures" are available – but perhaps blocked – when they simply start typing in "tiananmen."

"It appears that search queries produced by Google Suggest are being blocked for mainland users in China," Google spokeswoman Jessica Powell said in an e-mail. "Normal searches that do not use query suggestions are unaffected."

Although Google services such as YouTube do get blocked from time to time, the new constraints are the latest example of the Chinese government using its power to make Google's search engine a less convenient option on the mainland.

Google this week stopped automatically redirecting traffic from mainland China to its Hong Kong site after the government warned the maneuver could result in the loss of the company's Internet license in the country.

Google's relations with Beijing have been deteriorating since the U.S.-based search giant took a stand against the government's online censorship rules in response to computer hacking attacks that the company traced to China.

Google closed its China-based search engine March 22 and began routing users to its unfiltered site in Hong Kong. With the shift, Google hoped to be able to maintain its technological toehold in one of the Internet's most important markets while sticking to its free-speech principles.

But the Chinese government's threats to take away Google's license indicate it may punish Google for its defiance, even if the retaliation undermines the country's efforts to encourage more technological innovation.

Losing the Chinese license would be a significant setback for Google, even though China will only account for a fraction of the company's projected $28 billion in revenue this year. China already has emerged as the Internet's most populous market with nearly 400 million Web surfers, and usage is expected to rise for years to come.

Anything that hinders Google's ability to mine the China's growth potential would likely hurt its stock price, which has already fallen by nearly 30 percent since the start of the year. The shares were down $3.81 to $441.14 in afternoon trading Thursday.

Although Google's China license runs until 2012, it must be renewed annually. The company applied for renewal before Wednesday's filing deadline. Google hasn't received any indication when regulators will rule on the application.

The official Xinhua News Agency said "there will be a result soon" and Google was "very late" in submitting the application. Phone calls to the regulator, the Ministry of Industry and Information Technology, were not answered.

A foreign ministry spokesman, Qin Gang, did not answer directly when asked whether Google would be allowed to operate in China.

"Internet operating companies, while doing business in China, should abide by Chinese laws and regulations," Qin said. "We hope all foreign companies, including Internet companies, should comply with Chinese laws and regulations."

The China site, Google.cn, was operating Thursday with a tab that said "we have moved to google.com.hk." Clicking on that took users to the Hong Kong site.

If Chinese regulators decide the new linking technique still isn't enough to renew Google's license, Web surfers could still reach the Chinese-language Hong Kong site by typing in its ".hk" address directly. Industry analysts, though, believe many people would defect to Chinese competitors such as Baidu Inc.

Google, based in Mountain View, California, has about 30 percent of China's search market, compared with Baidu's 60 percent. Analysts say the rerouting of mainland China search requests so far has had little effect on revenue, but the outright closure of Google.cn could hurt advertising sales.

Google opened its China site in 2006 to attract more Chinese users after the government filters slowed their access to its main U.S. site, Google.com.

In a letter requesting Google's license renewal, the company's local partner, Guxiang Information Technology Co. Ltd., pledged to "abide by the Chinese law" and "provide no lawbreaking contents," Xinhua reported.

Also Thursday, a state-run newspaper said Google is not on the first list of companies that the government plans to approve to provide online mapping services.

Twenty-three domestic companies including Baidu, portal Sohu Inc. and e-commerce site Alibaba are among those expected to be approved, the China Daily said, citing the State Bureau of Surveying and Mapping.

Asked for comment on Google's situation, a U.S. State Department spokesman, P.J. Crowley, said Wednesday in Washington, "I think there are negotiations ongoing, and these are a matter between China and Google."

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AP Technology Writer Michael Liedtke in San Francisco contributed to this report.

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Online:

Google China site (in Chinese):

http://www.google.cn

(This version CORRECTS projected revenue for this year to $28 billion.)

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Filed by Bianca Bosker  |