China web filter developer's finance woes: report

The developer of a controversial Internet filter software in China has admitted financial difficulties — A security guard passes in front of computer advertising hoardings in Beijing. The developer of a controversial Internet filter software in China has denied it has closed due to a lack of funding, but it admits to having financial difficulties, state media has said.

The developer of a controversial Internet filter software in China has denied it has closed due to a lack of funding, but it admits to having financial difficulties, state media said Wednesday.

The general manager of Beijing Dazheng Human Language Technology Academy -- one of two companies behind Green Dam Youth Escort -- said the company's office had not closed nor had 30 employees been dismissed, the China Daily reported.

Chen Xiaomeng however did acknowledge that the company had been forced to move its office to a new location in the Chinese capital because of financial problems.

"We are going to publish clarifications," Chen was quoted as saying.

Officials at Beijing Dazheng were not available for immediate comment.

Last year, China ordered all computer makers to bundle the Green Dam software with any new personal computer sold in the country from July 1, 2009, saying it would shelter children from pornographic and violent web content.

But it was forced to back down on the plan just ahead of the deadline after an outcry in China and abroad, with critics charging that Beijing was trying to tighten its already strict web controls and block politically sensitive sites.

The government eventually installed the software in 20 million computers in schools and Internet cafes.

State media reported this week that the government had stopped funding the distribution and maintenance of the software, which could leave Green Dam users without technical or customer support.

In May 2009, authorities paid 41.7 million yuan (6.2 million dollars) to Beijing Dazheng and its co-developer in central Henan province to cover the cost of making the software and providing technical support for one year.

But the companies have received no further funding, the Beijing Times said Tuesday.

Earlier this year, California-based Cybersitter filed a 2.2-billion-dollar lawsuit in a US federal court against the Chinese government, the two software firms and seven PC makers for stealing its code to make Green Dam.