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Google 'may end China operations' Google 'may end China operations'
(40 minutes later)
Internet giant Google says it may end its operations in China after hackers targeted the e-mail accounts of Chinese human rights activists. Internet giant Google has said it may end its operations in China following a "sophisticated and targeted" cyber attack originating from the country.
It said it had found a "sophisticated and targeted attack on our corporate infrastructure originating from China". Google said the e-mail accounts of Chinese human rights activists were the primary target of the attack.
It did not specifically accuse China's government, but said it was no longer willing to censor its Chinese site's results, as the government requires. The company did not accuse the Chinese government directly, but said it was no longer willing to censor its Chinese search engine - google.cn.
Google says the decision may mean it has to shut the site, set up in 2006. This could result in closing the site, and its Chinese offices, Google said.
Phishing scam The search engine has now said it will hold talks with the government in the coming weeks to look at operating an unfiltered search engine within the law in the country.
US Secretary of State Hillary Clinton said Google's allegations "raise very serious concerns and questions", and that the US was seeking an explanation from China. Google launched google.cn in 2006, agreeing to some censorship of the search results, as required by the Chinese government.
Shares in Google fell by 1.1% to $584.80 in after-hours trading in New York, after the news was announced.Shares in Google fell by 1.1% to $584.80 in after-hours trading in New York, after the news was announced.
class="inlineText" href="http://googleblog.blogspot.com/2010/01/new-approach-to-china.html">In a blog post announcing its decision, Google's David Drummond said: "A primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists." Phishing attack
The company said its investigation into the attack found two Gmail accounts appeared to have been accessed. US Secretary of State Hillary Clinton said Google's allegations "raise very serious concerns and questions", and that the US was seeking an explanation from China.
ANALYSIS Chris Hogg, BBC News, Shanghai The Chinese authorities will be infuriated that Google has announced publicly it's considering whether to pull out of the country, before negotiations with officials get under way.ANALYSIS Chris Hogg, BBC News, Shanghai The Chinese authorities will be infuriated that Google has announced publicly it's considering whether to pull out of the country, before negotiations with officials get under way.
The assumption has always been that the China market is too big to walk away from. Foreign firms accept the difficult commercial conditions, the tough competition, government interference or censorship because the prize is worth it.The assumption has always been that the China market is too big to walk away from. Foreign firms accept the difficult commercial conditions, the tough competition, government interference or censorship because the prize is worth it.
However, activity was limited to account information such as the date the account was created and subject line, rather than e-mail content, it said. class="inlineText" href="http://googleblog.blogspot.com/2010/01/new-approach-to-china.html">In a blog post announcing its decision, Google's chief legal officer David Drummond said: "A primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists."
The company said its investigation into the attack found two accounts of its online mail service - Gmail - appeared to have been accessed.
However, the attack was limited to accessing account information such as the date the account was created and subject line, rather than e-mail content, it said.
It said it had also discovered that the accounts of dozens of US, China and Europe-based Gmail users, who are "advocates of human rights in China", appeared to have been "routinely accessed by third parties".It said it had also discovered that the accounts of dozens of US, China and Europe-based Gmail users, who are "advocates of human rights in China", appeared to have been "routinely accessed by third parties".
It said these accounts had not been accessed through any security breach at Google, but "most likely via phishing scams or malware placed on users' computers".It said these accounts had not been accessed through any security breach at Google, but "most likely via phishing scams or malware placed on users' computers".
At least 20 other large companies from a wide range of businesses were similarly targeted, it added.At least 20 other large companies from a wide range of businesses were similarly targeted, it added.
Google said it would hold talks with the Chinese government in the coming weeks to look at operating an unfiltered search engine within the law. Rebuke
The decision, it said, had been "incredibly hard" and was made by company executives in the US, not employees in China. Chris Hogg, the BBC's Shanghai correspondent, said Google's actions will have angered China.
Some Google shareholders... will see this as a commercial example of cutting off your nose to spite your face Robert Peston, BBC business editor Peston: Google's puzzling logic The Google v China face-off
"This will be the highest-profile rebuke by a major US firm of how China operates," he said.
"The fact that [Google] have come out publicly before sitting down to negotiate with Chinese officials - there is little doubt it will have outraged the Chinese."
BBC technology correspondent Rory Cellan-Jones said the attacks, coupled with further attempts to limit free speech, had led Google to reconsider its position.BBC technology correspondent Rory Cellan-Jones said the attacks, coupled with further attempts to limit free speech, had led Google to reconsider its position.
If it does pull out, the move will "leave other overseas web companies operating in China with difficult decisions to make," he said.If it does pull out, the move will "leave other overseas web companies operating in China with difficult decisions to make," he said.
Rebuke
The search engine market in China was worth more than $1bn in 2009, with analysts expecting Google to make about $600m from China in 2010.The search engine market in China was worth more than $1bn in 2009, with analysts expecting Google to make about $600m from China in 2010.
Chris Hogg, the BBC's Shanghai correspondent said Google's actions will have angered China.
"This will be the highest-profile rebuke by a major US firm of how China operates," he said.
"The fact that [Google] have come out publicly before sitting down to negotiate with Chinese officials - there is little doubt it will have outraged the Chinese.
"The interesting question is how the other big US companies operating in China will react."
Microsoft is among those companies with significant investments in China, including a proportion of the search engine market.Microsoft is among those companies with significant investments in China, including a proportion of the search engine market.
Google first launched in China four years ago after agreeing to censor some search results.
The move led to accusations it had betrayed its company motto - "don't be evil", but Google argued it would be more damaging for civil liberties if it pulled out of China entirely.