Search giant delivers results from Hong Kong
On Monday, Google stopped censoring Google Search, Google News and Google Images on Google.cn, according to a blog post from Chief Legal Officer David Drummond.
"Users visiting Google.cn are now being redirected to Google.com.hk, where we are offering uncensored search in simplified Chinese, specifically designed for users in mainland China and delivered via our servers in Hong Kong," he wrote.
As expected, the Chinese government didn't entertain allowing Google to continue operating an uncensored Google.cn. The Hong Kong work-around is "entirely legal", he said.
"We very much hope that the Chinese government respects our decision, though we are well aware that it could at any time block access to our services," Drummond wrote.
Google continues research and development work in China and maintains a sales team in the country. "All these decisions have been driven and implemented by our executives in the United States, and that none of our employees in China can, or should, be held responsible for them," Drummond wrote.
On January 12, Google shocked the world when it announced that it would stop censoring results in its China search engine, Google.cn, because the company had been the victim of hacking attacks originating in China.
Through the attacks, hackers stole Google intellectual property and broke into the Gmail accounts of China human rights activists, the company said. At the time, Google said it would seek talks with the Chinese government over ways it could operate Google.cn legally without censoring, although experts said the chances of that happening were at best slim.
If no middle ground was reached, Google said it would be willing to close Google.cn and shut its offices and operations in China, a drastic move considering China is one of the biggest and fastest growing internet and telecommunications markets in the world.
Google has declined repeated requests in recent weeks to discuss its China impasse and it is not clear how much present and future revenue the company would forego by exiting China's search market. Analysys International expects China's search market to reach 10 billion yuan ($1.46 billion) this year.
The impact on Google would be larger if it also stops providing online services like Gmail and Picasa, which it monetises via online advertising, and its Google Android mobile operating system, which it licenses to mobile carriers, handset makers and PC vendors.
All along, Chinese government officials have said Google must comply with local laws if it wants to continue doing business in the country. They have also said China's government has never been involved in any cyberattacks against Google or anyone else.
After initial, combative announcement on January 12, Google officials, particularly CEO Eric Schmidt, have sounded more conciliatory regarding the matter.
"We wish to remain in China. We like the Chinese people, we like our Chinese employees, we like the business opportunities there," Schmidt said during the company's earnings conference call on January 21. "We'd like to do that on somewhat different terms than we have, but we remain quite committed to being there."
He also seemed to ease up on Google's original certainty that the hacking originated in China, describing the attacks as "probably emanating from China with the origin details unknown" and adding that the matter was "still under investigation".
After January 12 and until now, Google continued to censor Google.cn, blocking results about topics the Chinese government finds politically sensitive, like the 1989 Tiananmen Square pro-democracy protests and Tibet's exiled spiritual leader the Dalai Lama.
During the impasse, Google's other operations in China have been largely unaffected, such as its Google Android mobile business. Despite the row between Google and the government, the country's IT Ministry said the Android operating system wouldn't be affected if it conforms to Chinese regulations. A variety of Chinese carriers and hardware makers, including China Unicom and Lenovo, moved forward with plans to market Android-based phones and laptops.
However, there has been uncertainty regarding Google mobile applications and services, including its search engine, in Android devices in China. Google postponed their availability after its January 12 announcement.
Google is a distant second in China's search engine usage behind leader Baidu. Last year, Google fielded almost 19 percent of China residents' queries to Baidu's 76 percent, according to iResearch. Compared with 2008, Google's share dropped 1.8 percentage points, while Baidu increased its share by 2.8 points.
Still, Google fared much better than Yahoo China, which is controlled by China's Alibaba Group and had a 0.3 percent share, and Microsoft, whose Bing search engine had a 0.4 percent share of queries, according to iResearch.
Baidu finished 2009 with total revenue of 4.45 billion yuan and net income of almost 1.5 billion yuan, up about 40 percent in each case.
According to its government's official figures, China had 384 million internet users at the end of 2009, making it the country with the largest internet population.
In addition to requiring censoring of search results, the Chinese government also blocks access to social media sites like Google's YouTube, Facebook and Twitter, monitors individuals' e-mail accounts and patrols websites for politically-sensitive or pornographic content. China makes no apology for the way it regulates Internet content and activities, saying its policies are geared towards preventing social ills, such as subversion and unrest.