Google ends cooperation with China

Search giant may stop operations there entirely

By Andrew Jacobs and Miguel Helft
New York Times / January 13, 2010

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BEIJING - Google, facing an assault by hackers who sought to penetrate the e-mail accounts of Chinese human rights activists, will stop cooperating with Chinese censorship and consider closing its offices and operations in China altogether, the company said yesterday.

An abrupt departure from China would be a startling end to Google’s foray into a country with more than 300 million Internet users. Since arriving in 2006, under an arrangement with the government that purged its Chinese search results of banned topics, Google has come under fire for abetting a system that increasingly restricts what its citizens can read on the Internet.

Google said it was unclear who orchestrated the attacks on its computer systems but described them as “highly sophisticated’’ and said they included an assault on at least 20 other large companies.

The primary goal of the hackers, the company said, were the Gmail accounts of human rights activists, although none of the targeted accounts were breached. Google did not publicly link the Chinese government to the cyberattack, but people with knowledge of Google’s investigation said the company had enough evidence to justify its actions.

The company said it would try to work out an arrangement with the Chinese government to provide an uncensored Internet - a tall order in a country that heavily filters the Web - but that it would close its offices in China if its demands were not met.

Wenqi Gao, a spokesman for the Chinese Consulate in New York, said he did not see any problems with “I want to reaffirm that China is committed to protecting the legitimate rights and interests of foreign companies in our country,’’ he said.

Google’s apparent decision to play hardball with the Chinese government raises enormous risks for the company. While Google’s business in China remains small for now, the country could soon become one of the most lucrative Internet markets, analysts say.

“The consequences of not playing in the China market could be very big for any company, but particularly for an Internet company that makes its money from advertising,’’ said David Yoffie, a professor at Harvard Business School.

Google’s announcement drew praise from free-speech and human rights advocates, many of whom had criticized the company in the past over its decision to enter the Chinese market, despite censorship requirements.

Google has been increasingly constricted by the Chinese government. Last June, after briefly blocking access nationwide to Google’s main search engine and other services, the government forced the company to disable a function that lets the search engine suggest terms.

At the time, some company executives suggested the campaign was a concerted effort to stain Google’s image. Since its entry into China, the company has steadily lost market share to Baidu, the country’s leading search engine.