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Google may exit China if censorship rules aren't loosened

SAN FRANCISCO — China's government gave little indication Thursday that it's willing to loosen its control over Internet search results, pushing Google closer to the brink of closing up shop and leaving the country.

In the government's first official statement since Google issued its ultimatum two days earlier, a Chinese official endorsed the country's current rules governing Internet content.

"China's Internet is open," said Jiang Yu, a foreign ministry spokeswoman. "China welcomes international Internet enterprises to conduct business in China according to law."

Google is still hoping that it can persuade the Chinese government to agree to changes that would enable its China-based search engine to show uncensored search results. "We are optimists," Google spokesman Scott Rubin said.

If a compromise isn't worked out within the next few weeks, the company intends to shut down its search engine at Google.cn and pull out of China completely. Rubin said Google hasn't set a deadline for breaking the impasse.

Google has been in touch with the Chinese government to alert officials about its plans, but Rubin didn't know whether the sides have scheduled additional meetings on the matter.

Images from the 1989 Tianamen Square protest cropped up in Google.cn's search results Thursday, leading some Web surfers to conclude that Google had begun to defy the government's rules requiring censorship of many politically sensitive issues. But Rubin said Google.cn is still censoring its results to comply with China's law and protect its employees in the country.

Google is prepared to abandon the Internet's biggest market because of computer-hacking attacks that pried into the e-mail accounts of human-rights activists protesting the Chinese government's policies.

The assault also hit at least 20 other publicly traded companies, according to Google. IDefense, the security arm of VeriSign, issued a report saying the attacks hit at least 34 companies, including Google.

Google traced the attacks on its computers to hackers in China, but so far hasn't directly tied the chicanery to the Chinese government or its agents. IDefense says its sources in the intelligence- and defense-contracting industries have determined the attacks originated from "a single foreign entity consisting either of agents of the Chinese state or proxies thereof."

Jiang said China prohibits e-mail hacking.

Outside Google's China offices, people continued to mourn the possible loss of the world's most popular search engine. Some people even poured small glasses of liquor, a Chinese funeral ritual.

The Global Times, known for a fiercely nationalistic tone, took an unusually conciliatory stance Thursday, warning that Google's departure would be a "lose-lose situation" for China.

"Google is taking extreme measures, but it is reminding us that we should pay attention to the issue of the free flow of information," the newspaper said. Saying China's national influence and competitiveness depend on access to information, the newspaper wrote, "We have to advance with the times."

A Google departure could give a boost to local rival Baidu, allowing it to pick up Google users and advertisers, analysts said.

Baidu's stock has surged 20 percent since Google announced its potential departure from China. Meanwhile, Google's stock is down by just 63 cents in the two trading days since the announcement, closing Thursday at $589.85.

Microsoft flaw blamed in attacks

Security softwaremaker McAfee said a flaw in Microsoft's Internet browser was exploited in recent cyber-attacks on Google. Microsoft confirmed the weakness in a Thursday advisory and said the hole can be closed by setting the Internet zone security to "high." It did not immediately issue a software fix. George Kurtz, McAfee's chief technology officer, said: "We are working with multiple organizations that were impacted by this attack, as well as the government and law enforcement. These attacks will look like they come from a trusted source, leading the target to fall for the trap and clicking a link or file. That's when the exploitation takes place, using the vulnerability in Microsoft's Internet Explorer."

Google may exit China if censorship rules aren't loosened 01/14/10 [Last modified: Thursday, January 14, 2010 11:54pm]
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