Google Inc said on Tuesday it will stop automatically rerouting users in China to an uncensored search page, a move that aims to preserve its operating license and signals a fight to save the firm's Chinese business.
Google's unexpected announcement comes ahead of a Wednesday deadline for renewal of its China license. The internet giant said China had made clear it was unhappy with a system which sends users directly to its uncensored Hong Kong portal.
Google.cn will now encourage users to click on the page to get redirected, instead of immediately transferring them.
It's clear from conversations we have had with Chinese government officials that they find the redirect unacceptable, and that if we continue redirecting users our Internet Content Provider (ICP) license will not be renewed, Chief Legal Officer David Drummond wrote in a blog on the company website.
Google, which battles Baidu for China's 380 million internet users, said in January it might quit the country over censorship and after it was hit by a sophisticated hacking attack that it said came from within China.
But after keeping its promise to end self-censorship by automatically rerouting users to its Hong Kong site, it now seems determined to hold on to its position in the world's largest online market by user numbers.
China, with its business potential, is a hard market to give up, Cao Jun Bo, analyst at Beijing-based technology research firm iResearch, said of the move.
Every China-based website needs an ICP license to operate in China. They are renewed every year by the Ministry of Industry and Information Technology, although industry sources said the process is largely procedural and it is very rare for a license be to revoked at the point of renewal.
China's Foreign Ministry on Tuesday declined comment on Google's decision to end automatic rerouting, but Drummond said he hoped it would be acceptable to the Chinese government.
It is unlikely Google would have moved without some blessing from Beijing, and there certainly would have been negotiations about the change, said iResearch analyst Cao.
Google's co-founder, Sergey Brin, in an interview with the Wall Street Journal in March, also said the original decision to reroute users to the Hong Kong site was a solution indirectly proposed to the firm by the Chinese government.
A Google spokeswoman declined to comment further on the details of the negotiations with Beijing.
The new Google page is extremely simple, with an image of the Google logo and a non-functioning search box, with short messages saying We have already moved to google.com.hk and Please save our new website. Clicking on much of the page redirects users.
The Hong Kong search engine does not however offer unfettered access to information the government wants blocked, if used from within China, as domestic firewalls prevent connections to many websites that Beijing objects to.
The Google.hk.com site is also periodically unavailable from mainland China, and searches can be unstable.
Among Google's high potential operations in China is its mobile operating system, Android, which is already very popular.
China Mobile has released smartphones into the China market using Android, and Credit Suisse analyst Wallace Cheung expects it to one day become the most popular mobile operating system in China.
But Google, which runs two research centers and has several hundred employees in China, may already have paid a price, in lost talent, for its spat with the government.
It has seen an exodus of executives at its China operations since the dispute flared up, as well as from partners collected under the umbrella of its advertising AdSense program.
It seems clear they want to have some engagement or business in China. But they are at a point right now where an increasing number of partners and AdSense partners are leaving Google, said Mark Natkin, managing director of Marbridge Consulting.
Natkin said at least three other licenses for Google business units in China were due for renewal in June.
(Additional reporting by Michael Wei; Editing by Nick Macfie)