News Analysis: In the days that followed Google's threat to cease operations in China after it discovered some Gmail accounts had been hacked, many experts mulled what effect the search engine's exit from the country would have on its search business.
Some look at Google's current search market share and search revenues in China and say such a move would have little impact. Google's China search share is at 31 percent, and analysts say Google banks about $300 million to $600 million from search advertising in China-between 1 to 2 percent of the company's total revenues.
But it's hard to imagine how Google wouldn't be impacted by leaving China. The country has some 360 million Web users. Google butters its bread online with advertising, and that value proposition extends its Android mobile operating system effort.
Google Jan. 5 began selling the Android-based Nexus One smartphone through its new retail Webstore channel.
If Google ceased to do business in China, would its opportunities to sell Android-based phones such as the Nexus One would dry up like a desert? That depends on whom you ask.
Gartner analyst Ken Dulaney pointed out that because Android is open source, software developers and manufacturers in China are free to do what they want. "I doubt the Chinese will care if it's free code."
Indeed, if Apple were to completely exit China, the channel for its iPhone would effectively dry up because Apple is the sole force behind the successful smartphone. AT&T just services it and iPhone developers are at the mercy of Apple. Thanks to its open-source genesis, Android could survive the Google imbroglio in China.
Yet Enderle Group analyst Rob Enderle believes that if Google is out of China and China blocks access to Google services, then the platform is effectively dead there. Even so, there is a workaround.
"However, Google could license their tools to a Chinese company or another firm who has a better relationship with China to get around this, and I expect that is what they would do. So while initially it would create some problems, there are workarounds and I would expect Google to take them."