Google (GOOG) May Keep Its Operations In China Alive

Google, Inc. (NASDAQ: GOOG), which has run into trouble with the Chinese government, may keep its operations alive in China even as its Chinese search engine may be shut down. The company has run into trouble with the Chinese government over censorship issues.

Google is considering keeping its research and development centre in Beijing in operation. The company also plans to continue with its advertising sales offices and mobile phone and browser businesses. Even some of the company’s web services such as its Chinese music search and Chinese version of its knowledge market site, Google Answers, may continue in China.

On January 12, Google had issued a statement saying that it will not follow the guidelines set by the Chinese government for its Chinese search engine. Ever since then, there is speculation on whether the company will completely shut shop in China. Analysts believe that the shutting down of Google.cn, the company’s Chinese search engine, will not have too much of an impact on the company’s profits as the company’s bulk of revenue in the country comes from advertisements placed by export-oriented companies that will have to continue advertising on Google’s main site. However, the company may see some negative impacts in the long-term.

Google has been contemplating how much of its operation it wants to continue in the country and has been cautious in the steps it has taken so far. According to analysts, the company is looking to reach a practical solution on the whole issue. “If I were a shareholder, I would feel that it does not make sense for them to forgo all future profit based on their frustration with censorship. There are an enormous number of businesses they can continue to pursue that are not touched by the censorship question,” said Gartner analyst Whit Andrews. Ideally, Google would want to stay in a market like China, which with its 400 million internet users offers a bright prospect for the company.