SHANGHAI (Reuters) - Google’s decision to shutter its Chinese search website and redirect users to its Hong Kong-based search page leaves the fate of its 600 China-based employees in the balance.
Angst among those employees, who work across a range of operations mostly in Beijing and Shanghai, has been high in the last two months since Google first announced it might withdraw from the market.
According to local media reports, a steady stream of employees were leaving Google China over that time, some concerned about the future of their jobs and others about potential liability if Google was found to be in violation of Chinese law.
Google employs about 600 people in mainland China. It has two research and development centres, sales and customer support staff as well as engineers working on its mobile Android platform and other initiatives.
Google’s current business in China accounts for a tiny slice of the company’s $24 billion in annual revenue. Analyst estimates of Google’s annual revenue in China range from $300 million to roughly $600 million.
Google emphasized in its official blog the decision to reroute its search page was made entirely in the United States by executives there, and has made protecting its Chinese employees a priority.
Beijing has made clear any sudden lifting of censorship is a violation of local laws, but has not commented beyond that on potential liability of Google’s employees.
Google said it would continue its research and development work in China and maintain a sales presence there, but added that the size of the sales team would depend on the ability of mainland Chinese users to access google.com.hk.
At the end of 2009, Google had around 30 percent of China’s $1 billion search market by revenue. Analysts said it was unclear how Google China’s ad resellers would react to the company’s decision to shift its China business to google.com.hk.
Much also depends on whether Beijing decides to block access to google.com.hk, in which case Chinese Web users would not be able to access the site even if they wanted, making it of little or no interest to advertisers.
Kaiser Kuo, an independent technology commentator based in Beijing, expects advertising revenue from China to be soft for this period as advertisement resellers would not want to make advertising budget decisions with so much uncertainty.
Over the past two months, local media has reported that morale was low among Google China’s employees. They also reported of many defections to Baidu, China’s domestic search leader as well as many Google employees submitting their resumes to other technology firms.
Reporting by Melanie Lee; Editing by Doug Young and Anshuman Daga