{"id":462750,"date":"2010-03-23T09:56:00","date_gmt":"2010-03-23T13:56:00","guid":{"rendered":"e2249889-c78b-43e3-9643-b1d7d4aa587b:411555"},"modified":"2010-03-23T09:56:00","modified_gmt":"2010-03-23T13:56:00","slug":"who-stands-to-win-and-who-winds-up-losing-if-google-leaves-china","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/462750","title":{"rendered":"Who stands to win and who winds up losing if Google leaves China?"},"content":{"rendered":"

As the Google vs. China saga<\/a> continues to drag on, Wall Street analysts
\nare left wondering what to make of the search engine titan's plans for
\nthe world's largest Internet market. <\/p>\n

Yesterday, Google Inc.
\nannounced it was shutting down its Chinese-language, China-based search
\nengine and had begun redirecting traffic to its Hong Kong portal in a
\nmove which drew swift condemnation from Beijing. <\/p>\n

By opting to
\nstop offering censored search results in China — which boasts the
\nworld's largest Internet market with more than 384 million users —
\nGoogle is running the risk of the Chinese government blocking Google
\nsites for its citizens. <\/p>\n

Of course, if Google loses access to
\nthe Chinese market, that's bound to have an impact on the Mountain
\nView, California company's core online advertising business, and its bottom line. <\/p>\n

While Google's
\ndecision to redirect Chinese users to its Hong Kong servers may prove
\nto be the beginning of the end for the company's China controversy, it
\n"does not end the negative reverberations that are likely to continue
\nfor some time," said BGC Partners technology analyst Colin Gillis in a note
\ndelivered to clients yesterday.<\/p>\n

"No one wins by Google's
\nactions," he said. "Google is not helping shareholders or the citizens
\nof China by exiting the country. China loses the benefit of having its
\ncountry grow by using Google's technology."<\/p>\n

Mr. Gillis — who
\nmaintains a Hold rating on Google's shares and a long term price target
\nof US$580 — said questions remain over how the hacking of Google's
\nGmail service by unidentified parties in China resulted in the
\ncompany's decision to stop offering censored search results. <\/p>\n

"The
\nlack of transparency from Google on the actual events and the decision
\nprocess that occurred is a disservice to shareholders," he said. <\/p>\n

Google's
\nactions could have a downside impact of between $10-billion and
\n$15-billion on the company's market value (about $30-$50 per share)
\ndepending on the severity of the response from the Chinese government. <\/p>\n

If
\nGoogle does wind up being shut out of China, or if Chinese users grow
\nfrustrated with the slower speeds of the search engine which are likely
\nto occur due to the increased traffic strain on the company's Hong Kong
\nservers, one possible winner would be Chinese-based search provider
\nBaidu. <\/p>\n

J.P. Morgan analyst Dick Wei raised his forecast on
\nBaidu to US$650 from $540 based on the assumption that Google would
\nlose 50% of its traffic to Baidu due to "inferior user experience" and
\nBaidu's "current weaker monetization capability compared to Google." <\/p>\n

Mr. Khan believes Baidu's revenue could jump by 8.5% ($85-million) in 2010 and 14.5% ($218-million) in 2011. <\/p>\n

However,
\nMr. Khan's forecast assumes Google will continue directing Google.cn
\ntraffic to its Hong Kong servers, Gmail will remain accessible from
\nChina, sites such as YouTube will still remain on the Google.cn servers
\nand that Google will maintain its marketing and R&D teams in China.<\/p>\n

"From our checks, Google.com.hk is currently accessible from
\nChina," Mr. Wei wrote in a note to clients yesterday. "Advertising is
\nup and running" sponsored advertisers links have moved to the HK
\nserver. While current situation is in line with expecation, we believe
\nthere are still risks that Google service will be blocked from China in
\nlong run."<\/p>\n

Matt Hartley <\/i><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

As the Google vs. China saga continues to drag on, Wall Street analysts are left wondering what to make of the search engine titan's plans for the world's largest Internet market. Yesterday, Google Inc. announced it was shutting down its Chinese-language, China-based search engine and had begun redirecting traffic to its Hong Kong portal in […]<\/p>\n","protected":false},"author":4057,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-462750","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/462750","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4057"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=462750"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/462750\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=462750"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=462750"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=462750"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}