Google announces to depart from China: Its financial impact

Google has threatened to shut down its operations in China, which is one of the most populous countries of the globe. Google has taken this decision as a result of the cyber attack that has changed the outlook of the company towards China.

Cyber attack in China

Originating within China, the primary aim of this attack was to hack the Gmail accounts of Chinese human rights activists. Apart from the Chinese activists, the cyber attack also targeted US and Europe based Gmail accounts that have supported the human rights movement in China. It occurred in the month of December in 2009. Google has stated that apart from the activists, several other companies have also been affected by the cyber attack. As a result, Google has threatened to stop censoring the results on Google.cn.

Probable financial consequences

China hasn’t proved to be a big moneymaker for Google as said by industry experts. However, according to the experts, Google will have to suffer certain financial consequences if it departs from China. The analysts estimate that Google could earn revenue worth $(250-600) from China in 2010. However, the amount is quite insignificant in respect to Google’s worldwide revenue that amounts to $22 billion.

Experts’ views on possible consequences

According to eMarketer Inc., a well known research firm, more and more people are supposed to get Internet access in China in the forthcoming years as the country’s economy will continue to grow. So, it can be expected that by the year 2013, about 840 million Chinese will start browsing the Internet at least once a month. It can be expected that it’ll also open opportunities to show online advertisements, which is a prime source of Google’s earning. As per Benjamin Schachter, a Broadpoint.Am Tech analyst, the stocks of Google will also suffer if it departs from China. The industry experts also mention that other search engines will make profit if Google finally decides to pull out its business from China.

However, in spite of these probable financial consequences, Google will be able to maintain its goodwill among the internet users, which can prove to be more favorable for the popular search engine in the long run.