SHANGHAI, Oct 19 (Reuters) - Google Inc (GOOG.O) said on Tuesday its termination of contracts with seven large Chinese advertising resellers goes into effect on Oct 27.
Google, which faced many operational hurdles since its high profile tussle with Beijing earlier this year, said in late September it would terminate the contracts with the seven ad resellers in China, without giving a reason.
“The letter was sent out to them on Sept. 27... We gave them a month’s notice,” Cindy Qin, a spokeswoman for Google told Reuters, confirming it will take effect on Oct. 27.
Google’s termination of the contracts with the seven AdWords resellers will have a positive impact on Baidu (BIDU.O), China’s leading search engine, analysts said.
Credit Suisse estimated in a note on Monday that the seven AdWords distributors contributed 1.5 billion yuan ($226 million) in gross revenue last year or about 40 percent of Google China’s revenue.
“We expect the incident to negatively affect Google and benefit Baidu,” Wallace Cheung said in a note.
Baidu is China’s leading search engine with more than 70 percent of the country’s search market by revenue. The firm will report its third-quarter results on Thursday after the U.S. market close. ($1=6.644 Yuan) (Reporting by Melanie Lee; Editing by Jacqueline Wong)