4) So Google is Still in China, Right?
Yes, for now. Google left its sales and research and
development teams there, which means some 600 Google China employees still have
jobs. Google doesn't want to leave China, where there are 400 million Internet
users ripe to put digital ads in front of via search and other Web applications.
5) That Means Google Will Still Make Money in China
Jefferies and Co. analysts said that as long as
the authorities allow mainland users to access Google's Hong Kong portal, the
Chinese advertisers would likely continue to advertise on that site. Why not?
There is still good real estate in Google search, which garners about 33
percent of the market share in China, compared to Baidu's 63 percent plot.
6) But Google Is Vulnerable...
Jefferies analysts added this caveat: "By redirecting
China traffic to an uncensored portal in Hong Kong, Google has effectively put
its China business at the mercy of Chinese authorities, who could potentially
cut off some or all levels of access to the Hong Kong portal from mainland
China." Expect an angry Chinese government to do everything it can to stymie Google.
7) Can Google Preserve Its Other Businesses?
Gartner's Andrews said it makes sense that Google would
go out of its way to preserve parts of its business that don't have anything to
do with censorship. This would include, for example, selling its Android-based
Nexus One phones in that country.
However, Google's Chinese partners will be
reticent to do business with Google for fear of retribution from the Chinese
government. "Partners are concerned the government will see doing business
with Google as disloyal," Andrews said.
8) And Yet...
James McGregor of APCO Worldwide in Beijing, who wrote the
2005 business book on China "One Billion Customers" said China had no
interest in thwarting innovation of Android and other Google products. "They
need Google in many ways," McGregor told CBS Marketwatch
9) Google to Expand Elsewhere in Asia?
Some believe this move will pressure
Google to expand in South Korea and Japan to retain a presence in
Asia-Pacific markets. Google commands less than 50 percent of searches in Japan
and 8 percent in South Korea, researcher comScore said.
10) To Baidu, Go the Spoils
With the Chinese government likely to further clamp down
on Google and Chinese citizens upset about Google shuttering Google.cn, Baidu
stands to gain from this standoff. Expect the Google of China to gain some
percentage points from Google over this affair.