Google expects regulatory OK to keep operating in China, for now

By Andrew Vanacore, AP
Thursday, July 8, 2010

Google expects regulatory OK in China, for now

SUN VALLEY, Idaho — Google CEO Eric Schmidt said Thursday he expects Beijing to renew the license the company needs to continue operating a website in China.

The renewal had been in doubt due to the tense relations between Google and Chinese authorities over censorship of Google search results.

Google closed its China search engine in March but wants to keep a website that offers music and other services. Users had been automatically redirected to Google’s uncensored Hong Kong site but the company stopped that last week after Chinese officials warned that the move could mean losing its license.

Talking with reporters at the annual media conference in Sun Valley, Idaho, hosted by investment bank Allen & Co., Schmidt said, “We now expect a renewal.”

Google’s relations with Beijing have been rocky since the U.S. search giant said it no longer wanted to cooperate with government Internet censorship. The announcement was prompted by cyber attacks the company traced to China.

The conflict poses a balancing act for Google. The company wants to uphold the principle of free access to information. It also wants to keep a foothold in a market that has nearly 400 million Web users, the world’s biggest.

Google, based in Mountain View, Calif., does not hold the kind of dominant position in the Chinese search market that it does in the U.S. The search engine operated by Chinese competitor Baidu has about 60 percent of the market to Google’s 30 percent.

Schmidt did not say when he expects Beijing to give it the OK. Google’s license runs though 2012 but needs a renewal each year. And he stressed that Google’s operations in China are still at the mercy of the Chinese government.

“They have the absolute ability to stop our operations if they should choose to,” he said.

In fact, China has routinely blocked parts of Google’s service such as YouTube.

Google said last week that users in mainland China were unable to use the “suggest” feature of its search engine, which offers possible results as they start to type a query.

(This version CORRECTS that Google wants to retain a website in China but has closed its China search engine)

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