Google partners call for clarity on China plans

BEIJING Wed Mar 17, 2010 6:03am EDT

1 of 3. A woman rides a bicycle past the Google China headquarters in Beijing March 15, 2010.

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BEIJING (Reuters) - Chinese firms selling advertising space on Google's search pages have demanded clarity about the search giant's plans in China, as speculation increases over Google's future in the world's largest Internet market.

Their demand comes amid signs that Google Inc may soon move to close Google.cn, more than two months after it hit back against sophisticated hacking attacks from inside China and said it was no longer willing to offer a censored search engine.

Google and China have been tight-lipped since then about any talks to reconcile their differences.

A letter purportedly from 27 Google-authorized sales representative companies says the wait has gone on for too long, eroding their business, scaring off employees and putting big investments in jeopardy.

"We see a constant stream of information but cannot predict the future, we see business sliding, but there is nothing we can do," says the letter, which was also posted on a website affiliated with China's central television. "We are waiting now in incomparable pain and disquiet."

Google has received the letter and is reviewing it, spokeswoman Jill Hazelbaker said.

Many of the signatories, contacted by Reuters, would not comment on the letter, or said they were unaware of it.

Some said that neither their affiliation with Google.cn nor the fight between Google and the government had hurt their business, although others acknowledged hesitancy by customers unsure of Google's future in China.

"We don't want Google to pull out. We believe Google will give us a proper explanation," said a customer service manager, surnamed Sheng, at Suzhou Universal Internet Media, adding she was not familiar with the contents of the letter.

The Wall Street Journal quoted one anonymous source who confirmed the contents of the letter, but added that not all the signatories had been involved in drafting the letter.

The companies sell advertising spots on Google search-result pages tied to certain searches.

COMPENSATION

The letter spells out demands for redress -- for investors, employees and clients -- that could add to the economic and political pressures on Google if it shuts down Google.cn and perhaps withdraws other operations from China.

The letter demands that Google develop a plan spelling out when customers' pre-payments for advertising will be returned to them, how employees of the advertising agents thrown out of work will be compensated, and how the companies themselves will be compensated for investments.

Addressed to Google's top executive for China, John Liu, it demands negotiations with the company.

A commerce ministry spokesman on Tuesday warned Google to obey Chinese laws and rules, including alerting the ministry to any exit plans.

Google's chief executive, Eric Schmidt, said last week he hoped to have an outcome soon from talks with Chinese officials on offering an uncensored search engine in the country of 384 million Internet users.

Many experts doubt China's ruling Communist Party would compromise on censorship. The Financial Times reported at the weekend the talks had reached an impasse and Google was "99.9 percent" certain to shut Google.cn.

A Google spokesperson said on Monday that talks with Chinese authorities had not ended, but added that the company was adamant about not accepting self-censorship.

China requires Internet operators to block words and images the ruling Communist Party deems unacceptable. Google.cn has not yet lifted that filter.

Internationally popular websites Facebook, Twitter and YouTube are entirely blocked in China, which uses a filtering "firewall" to block Internet users from overseas content banned by authorities.

(Reporting by Chris Buckley and Michael Wei in Beijing, additional reporting by Alexei Oreskovic in San Francisco; Editing by Lucy Hornby and Jeremy Laurence)

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