Google service disruption bodes ill for Chinese

March 31, 2010 By ALEXA OLESEN , Associated Press Writer

(AP) -- Disruptions suffered by Google Inc.'s Chinese search service show how vulnerable it remains to the country's Internet police - a threat industry executives said is likely to drive users and advertisers in the mainland away.

Though service resumed Wednesday, many users inside China were unable to search anything for the latter part of Tuesday. initially said it was an in-house technical problem but later shifted its explanation, blaming the "Great Firewall" - the nickname for the network of filters that keep mainland Web surfers from accessing material the government deems sensitive.

Whatever the reason, the outage reaffirmed suspicions that China's government would settle scores after a public dispute over prompted Google to shut its mainland-based search engine and move the service to the freer Chinese territory of Hong Kong last week.

"People are going 'Uh-oh, it's begun,'" said T.R. Harrington, chief executive of Shanghai-based Darwin Marketing, which specializes in advertising for China's search engine market. "People just have an expectation that there's going to be some problems based on how Google decided to make its exit and how the government reacted to that."

Chinese departments that monitor the Internet and maintain the network of filters rarely explain disruptions to individual sites and services. The press office at the Ministry of Industry and Information Technology declined immediate comment Wednesday on the outage and the possible reasons for it.

Google said it made no fixes or changes on its end to restore service, raising the likelihood that Chinese blocking - not technical glitches within the company - caused the trouble. "We will continue to monitor what is going on, but for the time being this issue seems to be resolved," the Mountain View, California-based company said in a statement.

The sudden disruption and lack of explanation fit with how the government has brought companies to heel previously in the heavily monitored Chinese Internet industry, analysts said.

"I don't think anyone should be surprised," said Bill Bishop, a Beijing Internet entrepreneur and author of the technology blog Digicha. Tuesday's problems were payback by the government, he said, because "Google humiliated China."

"Is it really realistic to expect that the Chinese government is just going to say 'OK, we're all friends now and go ahead about your business' after what just happened?" he said. "I think most people who've spent time in China and spent time in this industry dealing with the government would probably tell you that's a low-probability outcome."

Google's other China ventures began unraveling almost immediately after it announced its partial retreat, switching queries to in Hong Kong. Partners in mobile phone and other ventures said they were reviewing or scrapping service agreements with Google. Among them was China's second-largest mobile phone operator, China Unicom, which shelved plans to use Google search on two new cell phones running Google's Android software.

Industry analysts have said that in the past the used its control of telecommunications companies to slow the speed of queries and responses to some sites, driving customers away. Those slow speeds are thought to have played a part in undoing eBay Inc.'s business in China.

Service disruptions - or fears of them - drive users and advertisers away, and Google has already begun to be affected by those fears, said Edward Yu, president of Analysys International, a Beijing research firm.

Yu said his firm's research shows that Chinese advertisers are shifting their spending to homegrown companies like China's search leader Baidu, the auction site Alibaba and other kinds of market services "because they are afraid of the instability of Google services."

"The peak of the panic started from the moment Google said it was considering pulling out of , but later events confirmed the worry," said Yu.

Google, meanwhile, warned of a separate threat to Internet freedom in neighboring Vietnam, saying cyberattacks were attempting to silence opponents of a government-led mining project involving a Chinese company.

The attacks did not involve Google, but it said it was drawing attention to them because they underscored the need for the international community "to take cybersecurity seriously to help keep free opinion flowing."

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