Google Confident For China Licence

Google chief executive Eric Schmidt has expressed, he is confident that the company will secure a licence to operate the website in China but offered no timeframe. This revelation contradicts current suspicion that Beijing had plans to shut down its flagship site there.

Schmidt revealed the news whilst addressing executives and financiers at an annual gathering of the industry's movers and shakers in the Idaho Mountain resort of Sun Valley.

Analysts said Google's decision to stop automatically rerouting users to its uncensored search page showed a softening of stance and willingness to compromise to maintain a foothold in China, the world's largest internet market by users.

"We would expect we would get the necessary licence," Schmidt said. "We now expect to get a renewal."

The speculation fuelled back in January when Google stunned markets and consumers as suggested that the search engine giants might quit the country, due to China's requirements for censored search results.

In March, Google began to redirect visitors to its China website to a search site in Hong Kong that provided uncensored results. But last week, Google said it would stop automatically rerouting users after Beijing indicated it would not renew its internet content provider licence if it continued to do so.

"The government views the January announcement as a loss of face," said Edward Yu, chief executive of Beijing-based research firm Analysys International, speaking before Schmidt's comments.

"But because Google has now made this move, there is a chance they will most probably meet in the middle and Google will get the licence."

The company's row with the Chinese government over internet censorship and hacking attacks added to a burst of tensions between Washington and Beijing, which also saw diplomatic spats over China's currency, US arms sales to Taiwan and Tibet.

The storm appears to be over now and feuds seem to have subsided in recent months. On Thursday the Obama administration declined to label China a currency manipulator, and a decision to allow Google to keep its Chinese website could remove another source of friction.

On Wednesday, China's ministry of industry and information technology said that it was reviewing Google's licence renewal application but gave no deadline for completion.

Analysts and investors have discounted a severe curtailment of Google's business in the world's third largest economy.

Some analysts believe and expect that an outright licence rejection could be the first catalyst in a long line of trouble to come for Google's non-search businesses in China, such as Android-based mobile phones, now carried by the nation's largest telecoms carriers.

Google now operates a landing page for its website and clicking anywhere on the page brings the user to the site. But if Beijing refuses to renew its licence, the site would be effectively shut down.

Schmidt's comments come halfway through what has been a turbulent year for the company, as the world's No 1 search leader deepened its rivalry with iPhone-maker Apple and social network Facebook. Google is due to report its second-quarter financial results next week.

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