Google’s incendiary statement appears to burn the company’s bridges in China.
There does not appear to be much wriggle-room, and judging from the conversations I have had, the company does not believe that Beijing will bow to its ultimatum.
Beijing, of course, has been silent on the issue. Some analysts believe there is a possibility that the government may back down, as it did over Green Dam, because of the incredible damage that losing Google would do its image. However, they are in the minority.
I think that Google.cn will almost certainly close down (Paddy Power, a British bookmaker, is offering odds of 3/1, so get your bets in). I’m told the process will take a year or so to complete.
Google China has already shrunk the number of its staff and it appears to have conceded that it will never usurp Baidu as China’s dominant search engine. Gmail is run internationally, so the 10 million or 20 million current Chinese users will not lose their service.
However, Google is likely to retain a research and development base in China – after all, engineers are far cheaper here than anywhere else – and could eventually re-enter.
Google’s departure will take the pressure off Baidu, which in turn is unlikely to innovate at anywhere near the same rate. A few years down the line, perhaps Google will return. Or Google.com will become the predominant standard.