What next for Google in China?

Two months after Google shook the world with its threat to leave China on censorship and hacking concerns, there are increasing signs that an exit is imminent as the two sides refuse to back down.

Google said in January a key condition to staying on in China, the world's largest Internet market by users, would be an end to rules that require it to self-censor results. Beijing has repeatedly thrown cold water on any such expectation, maintaining that all Internet firms need to abide by local laws.

Following are the possible paths the world's largest search company could take, and the possible reactions from Beijing:

GOOGLE PARTIALLY WITHDRAWS

In addition to its Chinese search site, Google.cn, Google has two research and development centres, hundreds of sales and customer service staff and engineers working on its Android mobile operating system and other initiatives in China.

Google could well decide to pull the plug on Google.cn, but leave its other China-based operations intact.

The manner in which the company executes such a pull-out would also be of importance to its employees and reputation.

If Google goes out with a bang by halting censorship of its China site before shutting it down, hundreds of local employees could be at risk for working for a company that broke local laws.

But given the very public nature of its initial threat, many believe such an underhanded withdrawal is unlikely.

By being up-front about shutting its China search site, Google -- whose motto is "Don't do evil" - could generate positive publicity from sympathetic quarters in the West, including politicians, media and human rights groups.

GOOGLE FULLY WITHDRAWS

Google could decide that China isn't worth the trouble and completely pull out, including all its R&D and Android support operations.

Such a move would put hundreds more out of work, and could jeopardise firms like Dell and Lenovo that were banking on Android-based phones as a major part of their push into the China cellular market.

Independent software application developers who were counting on Android phones to carry their programs could also find themselves out in the cold.

China warned last week that it would be "unfriendly and irresponsible" for Google to suddenly stop filtering searches, and added the search giant would have to bear whatever consequences might follow.

Some say that such words could be a veiled warning from Beijing that Google would not be welcome in China if it leaves the local search market, giving the US search giant no other choice than to pull out entirely.

GOOGLE STAYS

Google could cut a deal with Beijing and work out a plan to stay in China under a face-saving compromise.

Many consider this outcome unlikely as Google has stated that freedom from censorship is key to its staying. A condition Beijing is unlikely to bow to given its insistence on direct or indirect control of all media in the country.

In giving in to Google, Beijing would also set a dangerous precedent, possibly prompting other popular Web site operators such as Baidu and Sina to request similar exemption from self-censorship laws.

Thus the probability of regulators bending rules just for Google is highly unlikely, meaning Google would still have to self-censor at some level if it wanted to stay.

- Reuters