Google Inc. (NASDAQ:GOOG) announced the closure of its shopping services from the Chinese market today saying it’s offering was able to add enough value to the lives of its Chinese subscribers and was losing popularity among them. This is the second time in three months the company has decided to pull out of the world’s largest internet market. Its latest retreat was in September this year when it shuttered it’s free online music search facility for the Chinese users only after three years of its launch.
Google Inc.(NASDAQ:GOOG) will now shift focus towards non search related services including mobile advertising applications and desktop displays. According to an official statement of the company, it is always ready to “try big, bold things, and that won’t change,” however it can serve corporate users in China grow online far better by focusing its efforts more “effectively” on its “core mobile, display, and export ads products”.
Alibaba Group Holding Ltd., which owns a larger part of the Chinese e-commerce market through its shopping search engine etao.com. Has been “Google Inc.(NASDAQ:GOOG)’s largest competitor in the Chinese e-commerce niche. According to a Credit Suisse analyst Wallace Cheung who is based in Hong Kong, the Californian Company stood no chance in front of a competitor like Alibaba “from day one”.
Commenting on the censorship policy issues between Chinese regulators and Google Inc. (NYSE: GOOG), Cheung said the choice of a non search related business like Ad Mob and mobile or desktops display is a better decision. Engaging in such businesses would help the company minimize friction and will also help reduce its “concern about their government relationship.”
The Chinese government very vigilantly monitors all online activities and web contacts made by its citizens. The same regulations had lead Yahoo Inc! (NYSE:YHOO) to disclose personal information. A “.cn” account of a Chinese journalist who was jailed for ten years under charges of letting out state secrets. The same year the company had wrapped its Chinese business for a 40% stake in to Alibaba Group Holding Ltd, a move that was viewed as an attempt to avoid excessive heresy that could potentially impair its goodwill. The American companies face critique in global markets for playing soft over human rights’ violations.
This was the ethical dilemma that Google Inc. (NYSE:GOOG) chose to play differently when it simply abandoned its search engine business after declining to comply with the capitalist government’s censorship policies.
Google Inc.(NASDAQ:GOOG) had to cut off its Chinese users from its global search engine in January 2010 over disputes with the Chinese government’s regulations for self-censoring Web contents. Since then the company has limited its Chinese landing page to translation services and experimental uses while user searches from China are being redirected to a site based in Hong Kong.
The shares of Google Inc. (NASDAQ:GOOG) were up by 0.10% to close at $697.56, shares of Yahoo! Inc. (NASDAQ:YHOO) were down by 0.72% to $19.38.
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