Updated from 12:28 a.m. EST
MOUNTAIN VIEW, Calif. (
said it's no longer willing to censor its search results in China and could potentially shut down its Web site and its offices in the country.
said over the next few weeks it would be meeting with the Chinese government to discuss the basis on which we "operate an unfiltered search engine within the law, if at all."
Google's statements were prompted by evidence that computer hackers had accessed the email accounts of Chinese human rights activists. Google also said it discovered that at least 20 other large companies from a wide range of industries were targeted by hackers.
"These attacks and the surveillance they have uncovered -- combined with the attempts over the past year to further limit free speech on the Web -- have led us to conclude that we should review the feasibility of our business operations in China," said David Drummond, Google's senior vice president, corporate development and chief legal officer, on the company's blog. "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."
Google has said it derives an "immaterial" amount of its $22 billion of annual revenue from its Chinese operations. A JPMorgan analyst had been expecting Google's China revenue to total about $600 million this year, the
If Google does pull out of China, the beneficiary would be
which processes more than 60% of all search requests in China. Google is a distant second.
The latest report from Analysys International said Baidu had 58.4% of search revenue in the fourth quarter in China, while Google had 35.6%.
"There's no other competitor, so if Google pulls out, Baidu is left by itself," Erwin Sanft, an analyst at BNP Paribas in Hong Kong, told
. "If they pull out of China, it's very hard to really get back in the market and still have a similar presence."
Google launched its Chinese Web site in January 2006.
Google's announcement comes a day day after
, with some reports saying the group responsible for the attack was the one that took down Twitter last month.
-- Reported by Joseph Woelfel in New York.
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