My 7/11/10 Missoulian column
Rather than the cat-and-mouse game I mentioned last week, Google’s business adventures in China turned into a case of “Do you think you can dance?”
And then suddenly Friday morning, the music stopped and the dance – at least until the next song starts up – was over.
Google had been waiting on the Chinese government to renew its business license – which was up for renewal at the end of last month – without which the search giant would have to close down their mainland Chinese operations. China had been sitting on the renewal for months, saying the process takes time.
But, mostly, Google and China were wrangling over censorship. In March of this year, Google automatically redirected search requests to (mostly) uncensored servers in Hong Kong after hacking incidents. But then Google backed off a bit last month: They stopped the automatic redirect, and added a link users had to click on to go to the Hong Kong-based search.
That change was to make some amends to the Chinese government so that renewing Google’s business license was more palatable.
And then last week, Google invested around $1 million in the Chinese online music provider company Top100.cn, the top music download site in China. Another investor was Chinese basketball star Yao Ming, which may or may not be a step or two in Google’s dance.
Paul R. La Monica points out in CNNMoney.com that Google is suffering from slowing growth and a 30 percent drop in stock price this year. (That’s more than $5 billion in losses on paper to each of the two founders, Sergey Brin and Larry Page.)
So Google may be just looking at their stock price and is desperate to stay in China. But over the last few years, Baidu, a Chinese language search engine (and Google’s main rival) has gotten stronger. Baidu now has almost 60 percent of the Chinese search market to Google’s 22 percent.
Maybe that’s what the dance was all about: China dragging out the game while giving a chance for Baidu to grow. After all, China could wait. Google couldn’t.
But then on Friday morning, the Chinese government renewed Google’s license. Google is back in business in the world’s largest Internet market. Immediately, Google’s stock jumped and Baidu’s dropped.
And so it goes, at least until the next song.
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