Partner Defections, Ongoing Censorship Complicate Google's Plan to Keep Some Business in China

Google's plan to keep some of its China business while avoiding censorship is looking increasingly complicated as more Chinese partners turn away from the U.S. Internet giant and it becomes apparent that some remaining operations will continue to be censored.

Analysts estimate that Google gets 1% to 2% of its global revenue from China, or roughly $250 million to $500 million last year. Edward Yu, chief executive of Analysys International, a Beijing-based research firm, estimates that 30% to 40% of Google's Internet-search revenue in China comes from sales of ads placed on Google's sites outside the country, such as Google.com. That revenue isn't likely to diminish dramatically, analysts say. Google will remain an attractive ad platform for Chinese companies that use it to reach a global audience, like Alibaba.com Ltd., an online-trading platform that is one of China's most prominent Internet companies and that advertises on Google.com. How much of the remaining two-thirds or so of Google's China revenue is sustainable is less clear. Google's operations in China include video-search, music and map services, and a mobile Web site—some of these run in partnership with Chinese companies. Google has obligations to fulfill its contracts with those companies, which must remain in compliance with censorship rules, even if Google isn't.