Google Maintains Hiring, Seeks Additional Advertisers in China

Google Inc. is adding employees and redoubling efforts to win new advertisers in China, even as a clash over censorship casts doubt on its ability to do business in the country, said Chief Legal Officer David Drummond.

The company is hiring sales and engineering staff, Drummond said from Bloomberg’s San Francisco bureau yesterday. The moves are aimed at helping Google regain its footing after Chinese officials threatened not to renew its service provider license.

“It’s both stable and uncertain,” Drummond said. “We have a license, we have a structure for operating and serving users there, but that could change.”

Google, the world’s most popular Internet search engine, remains concerned about censorship -- and not just in China, Drummond said. Google’s YouTube has been blocked in Turkey for two years, and videos critical of authorities are restricted in Thailand, he said. The Mountain View, California-based company has increased its staff handling government relations globally by at least 20 percent in the past year.

“We’re very concerned that the openness of the Internet is under attack,” Drummond said. “We actually have an impact on a lot of civil societies and governments in a lot of these places where we have millions of users, so it’s important to be there and for governments to understand what we’re up to.”

Switch to Hong Kong

In China, a series of attacks on Google computers led the company to stop censoring search results and instead redirect visitors to its unfiltered Hong Kong site -- a move that caused it to lose market share to local rival Baidu Inc. Some Google content is blocked in 25 percent of the countries where it operates, the company said in April. Maintaining a beachhead in these areas and working with governments can help improve Google’s global business prospects, Drummond said.

Google’s license to operate in China was renewed in July, and the company expects it to be renewed again next year, barring a change in posture from Chinese officials, he said.

Drummond has called on the U.S. and European governments to take a firmer stance on censorship in foreign countries, arguing it limits competition in emerging markets.

“Censorship itself is a trade barrier,” he said. “It actually serves as a form of protectionism.”

Western countries have increasingly held Google and other Web companies responsible for content uploaded by their users -- a dangerous precedent, Drummond said. In February, an Italian court found Drummond and two other current and former Google employees guilty of privacy violations after a group of students in the country uploaded a clip of themselves bullying an autistic classmate.

‘Crushing Amount’

“That’s a crushing amount of liability to expect Facebook or YouTube or anyone to bear,” he said. Drummond was sentenced to a six-month term, which was suspended. Google said at the time it plans to appeal the “astonishing decision.”

Google also faces antitrust scrutiny in the U.S. Texas Attorney General Greg Abbott’s office is conducting an antitrust review, the company said in September. Abbott’s office asked for information on claims that some companies receive higher rankings in Google’s search-results pages than others. Google’s acquisitions have also been examined by federal antitrust authorities.

“We’ve been pretty successful, so I think we sort of expect to have scrutiny,” Drummond said. “When you look at the specifics of the cases and some of the complaints, we’re pretty confident there aren’t any concerns.”

Google is the dominant search provider in the U.S., with 65.4 percent of the market in August, according to Reston, Virginia-based ComScore Inc. Yahoo! Inc. had 17.4 percent, while Microsoft Corp.’s Bing had 11.1 percent.

“When you’re talking about search, you’re talking about a free product, first of all, where there are lots of alternatives,” Drummond said. “High market share does not mean monopoly or market power.”

To contact the reporters on this story: Douglas MacMillan in San Francisco at Dmacmillan3@bloomberg.net; Brian Womack in San Francisco at Bwomack1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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