As expected, Google’s late March exit from China is benefiting Baidu, China’s number one search engine.

This Reuters story has some stats the Chinese company’s rapid growth:

Baidu posted first-quarter net profit of 481 million renminbi, or $70.4 million, up from 181 million renminbi a year ago. Analysts expected profit of 366 million renminbi, according to Thomson Reuters data.
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Sen. Richard Lugar of Indiana, the ranking Republican on the Foreign Relations Committee, wants to know why China has 60 cultural centers in the United States while the United States has none in China. Lugar questioned Secretary of State Hillary Clinton about the disparity a couple months ago, as reported by the Washington Times:

“The Chinese, according to our records, have now established 60 Confucius centers here in the United States, but they are permitting only four of our centers to be built in China,” Mr. Lugar told Mrs. Clinton. “So I call this to your attention for some potential negotiations with [our] Chinese friends, as we try to extend this idea of diplomacy centers, which I think is important.”
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China’s so-called Great Firewall is well known for filtering out controversial content relating to democracy, Tiananmen Square and criticism of Beijing. But as this New York Times article shows, a large part of the censorship effort includes positive spin to proactively promote the government’s view:

Not content merely to block dissonant views, the government increasingly employs agents to peddle its views online, in the guise of impartial bloggers and chat-room denizens. And increasingly, it is backing state-friendly clones of Twitter, Facebook and YouTube, all Western sites that have been blocked here for roughly a year.

The government’s strategy, according to Mr. Bandurski and others, is not just to block unflattering messages, but to overwhelm them with its own positive spin and rebuttals.

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Just a week after Google took on China directly by redirecting Google.cn users to Google.com.hk, the Mountain View behemoth is accusing Vietnam of cyber attacks directed at Vietnamese computer users around the world in its Security Blog:

In January, we discussed a set of highly sophisticated cyber attacks that originated in China and targeted many corporations around the world. We believe that malware is a general threat to the Internet, but it is especially harmful when it is used to suppress opinions of dissent. In that case, the attacks involved surveillance of email accounts belonging to Chinese human rights activists. Perhaps unsurprisingly, these are not the only examples of malicious software being used for political ends. We have gathered information about a separate cyber threat that was less sophisticated but that nonetheless was employed against another community.
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Choe Sang-Hun of the New York Times has an article about how some North Koreans are risking death to send information about their notoriously closed off country to South Korea and other Western allies:

The networks are the creation of a handful of North Korean defectors and South Korean human rights activists using cellphones to pierce North Korea’s near-total news blackout. To build the networks, recruiters slip into China to woo the few North Koreans allowed to travel there, provide cellphones to smuggle across the border, then post informers’ phoned and texted reports on Web sites.

The work is risky. Recruiters spend months identifying and coaxing potential informants, all the while evading agents from the North and the Chinese police bent on stopping their work. The North Koreans face even greater danger; exposure could lead to imprisonment — or death.
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Google may have been first but it won’t be the last. Two companies that sell domain names announced Wednesday that they will no longer register new domain names in China because of demands by the Chinese government for additional identification from their customers. This AP story by Joelle Tessler has more:

One of the domain name companies, Go Daddy Inc., announced its change in policy at a congressional hearing that was largely devoted to Google Inc.’s announcement Monday that it will no longer censor Internet search results in China.

Christine Jones, executive vice president and general counsel of Go Daddy, said the company’s decision was not a reaction to Google but instead reflects its concern about the security of its customers and “the chilling effect” of the new Chinese government requirements.
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The New York Times has good article about some of the Chinese companies that are likely to benefit in the short term — but perhaps be less competitive outside of the country — due to Google’s departure. Google was never a great fit in China, with Baidu taking the lion’s share of the search market, and other American companies like Yahoo and Twitter faced obstacles as well:

Google and other major American Internet companies like Yahoo and eBay failed to gain significant traction in the Chinese market. And Facebook, Twitter and YouTube are blocked by the government.

Instead, the hottest companies in the world’s biggest Internet market have names like Baidu, Tencent and Alibaba — fast-growing local firms that are making huge profits. Post-Google, China’s Internet market could increasingly resemble a lucrative, walled-off bazaar, experts say. Those homegrown successes, however, could have trouble becoming global brands.
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Google just made it official by posting on its blog that it has stopped censoring its Google.cn search results and is redirecting users to Google.com.hk:

[E]arlier today we stopped censoring our search services—Google Search, Google News, and Google Images—on Google.cn. 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. Users in Hong Kong will continue to receive their existing uncensored, traditional Chinese service, also from Google.com.hk. Due to the increased load on our Hong Kong servers and the complicated nature of these changes, users may see some slowdown in service or find some products temporarily inaccessible as we switch everything over.
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Whenever Google is mentioned with regards to China, there’s usually the disclaimer that it only has a much smaller market share than the main Chinese search engine, Baidu. It’s easy to lose sight of how big Google still is given China’s enormous population.

This Washington Post article has some interesting stats:

Since coming to China in 2005, Google has, as in much of the rest of the world, become embedded in the lives of its users. Its search engine Google.cn has almost one-third of the market share in a country with 350 million Internet users. Hundreds of government officials have Gmail accounts, according to estimates by one senior Chinese official involved in monitoring the Internet. Chinese exporters can’t work without Google Translate. An estimated 12 million Chinese use Google Maps every day. Scientists and researchers rely on the Google Reader and Google Scholar for the latest in academic work.
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China Business News is reporting that Google will announce Monday that it is pulling out of China. According to this CNN article:

The Shanghai-based publication reported that Google is expected to announce on Monday it would shutter its China operations on April 10, quoting an unnamed Google employee and a Chinese sales agent for the company.

A spokesperson for Google in China wouldn’t comment on the report.
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