Google China WarAfter 4 years of Google dealing with severe censorship from Beijing, Google officially decided to “review the feasibility of our business operations in China” and is no longer willing to consider censorship of its Google site in China, Google.cn.  This declaration of war comes on the heels of Google discovering a sophisticated and extremely targeted attack on Google that originated from China.  According to reports, the Gmail accounts of Chinese human rights activists were hacked into and over 20 other companies had been targeted by hackers located in China.

On their official blog Google’s Senior Vice President David Drummond said, “We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China.”  To this I must give kudos to Google for not backing down to the big bully that China has show itself to be.  Censoring the content that Chinese Internet users are able to access is ludicrous.  How are people supposed to learn about their country’s history, as tainted as it might be, without access to all of the facts?

What does this mean for the Internet search marketing business in China?  Currently Google.cn controls only 31% of the market share for China’s Internet searches, with leader Baidu controlling a commanding 64%.  This means when Google pulls its operations from China, Baidu could potentially control 95% or more of the search marketing business in China.  That is HUGE – as China boasts more than 360 million Internet users all behind “The Great Firewall of China.”  However, increased Internet censorship in China may also decrease Internet use which will ultimately impact earnings for any search company that does business in China.

Although the estimated $350 million in pay-per-click (ppc) advertising revenue Google earns from China may seem like a large amount, it only represents 1.5% of the Internet behemoth’s total annual revenue.  Only time will tell if Google decides to continue their war with China.  Stay Tuned!