Google Inc., the global Internet search engine giant, might have
some trouble on its hands because it reportedly doesn't have the
necessary license to operate in China.
According to a Beijing News report yesterday, Google's
China website (Google.cn) didn't have the requisite ICP (Internet
Content Provider) license when it launched its Chinese-language
platform?in late?January.?
Wang Lijian, spokesperson for the Ministry of Information
Industry (MII), told Xinhua News Agency today that they have
investigated the matter and the results of their investigations
will be announced soon.
Under pressure to get a piece of the China market pie, Google
launched its Chinese-language after months of testing, going head
to head with domestic Internet heavyweights like Baidu.com.
Google has denied the allegations. "Google has a partnership
with Ganji.com through which Google has the required license to
operate Google.cn," Google spokesperson Debbie Frost said in a
written statement.
Google added that they aren't the first foreign Internet company
to ride on the license of a Chinese partner. "For instance, Yahoo
is using the same ICP license as 3721.com and Amazon is sharing
their ICP license with joyo.com."
Dr. Kai-Fu Lee, president of Google.cn, convened an urgent
telephone meeting with media members yesterday afternoon, to
emphasize that the practice is well within the law.
Under China's Internet administration rules, foreign web
companies applying for an ICP license must withdraw all foreign
investment in or hand over its service operations including assets,
staff, domain name, trademark and clients to a Chinese partner, and
set up another company that is totally controlled by the Chinese
partner.
Foreign parent companies can only receive payment for technical
support or through service cooperation agreements.
If a joint venture wants to obtain an ICP license, the
foreign-owned shares in that JV must be kept below 50 percent.
Beijing News alleged that this wasn't the case with
Google.cn. Ganji.com was not even mentioned in its financial
reports. Sources with the MII were quoted as saying that the Google
situation is quite different from the Yahoo or Amazon situation
because "3721.com is an asset Yahoo has bought and joyo.com was
purchased by Amazon," but Ganji.com is in "no way a subsidiary
company of Google in China, and the so-called cooperation between
the two is very vague."
Quoting a source close to Google.cn, Beijing News said
that the matter has been reported to Google's US headquarters and
there has been talk of either a big investment or a buy-out.
Although Ganji.com is not in the Internet search business, it's
their license that Google's after. ?
Google declined to comment on the speculation.
(China.org.cn by Zhang Rui, February 22, 2006)