China Unicom boycott of Google Inc.’s search engine signals the fallout from the U.S. company’s disobedience of government censorship is spreading.If you were partnering with Google in China, your business plans have just fallen apart,” Bertram Lai, head of explore at CIMB-GK Securities in Hong Kong, said by phone. “You need to move quickly and find new partners.”
Google’s decision to stop censoring its Chinese service has spur speculation that advertisers may switch to rival search engines such as that of Baidu Inc. In the U.S., Go Daddy Group Inc., the world’s largest registrar of domain names, said yesterday it’s refusing to offer new site identities in China, citing increased Internet spying by the government on its citizens.
Chinese partners for Google’s search operations need to appraise their business ties as the U.S. company’s Internet service license in China needs to be renewed soon, said Fang Meiqin, research director at BDA China Ltd., a Beijing-based telecommunications industry consultant.
“Unicom has dropped Google from its handset plans because Google no longer operates within China,” Lai, who rates Unicom shares “underperform,” said. “It makes sense for them to make the decision immediately” to avoid the costs of reprogramming handsets to remove Google later, he said.
Google’s redirection of its search queries is effectively a pullout from China, reducing the appeal for advertisers, Steven Chang, the Shanghai-based chief executive officer for China at Zenith Optimedia, which buys ads from Google and Baidu on behalf of clients, said in an interview this week.