Google May Close Chinese Search Engine April 10

Two months after Internet giant Google (GOOG) challenged the Chinese government to an epic game of chicken over censorship, one side appears on the verge of backing down. And it's not the Chinese government.

On Monday, Google may announce plans to shut its Chinese language search engine on April 10, according to a report Friday in the China Business Newscited by Reuters. If true, that would bring an end to weeks of speculation among Google's Chinese partners.

Game Over?

Google's exit from China would be a stunning move on the international economic stage that would cost Google as much as $500 million this year and create a public relations headache for Beijing. China certainly doesn't need Google, but the fact that the internationally respected company would forsake half a billion dollars to protest China's censorship policies would be a black eye for the communist government.

By publicly announcing its decision to stop abiding by China's Net-censorship, Google gave the government -- which controls the Chinese media and Internet in order to suppress dissent -- virtually no room to negotiate. Since Google's January announcement, Beijing has shown no signs of relaxing its position.

"The Chinese were never going to cave to what they saw as unilateral demands from Google," Ian Bremmer, president of the geopolitical research firm Eurasia Group, told me recently.

Google may be powerful. But to the authoritarian government of the world's largest -- and very fast-growing -- country, Google appears to be little more than a nuisance. And it remains to be seen whether Google's exit will even relax the information restrictions it protests. For years, Google censored its Chinese-language search engine, per state law, but after a massive, China-based cyber-attack, the company announced it would cease doing so.

Possible Announcement Monday

After weeks of uncertainty -- presumably during which time negotiations were underway -- the dispute took a turn for the worse last weekend when a senior Chinese official called Google "unfriendly and irresponsible," and reiterated the country's position: Follow the law, or get out. Last week, Google CEO Eric Schmidt said the dispute would be resolved -- one way or another -- "soon."

The Chinese daily financial newspaper said Google would make an announcement on March 22 -- this Monday -- announcing its decision and detailing arrangements for worker compensation should it exit the country. Separately, an unnamed person affiliated with Google's Chinese operations told the paper that Google was preparing to leave the country on April 10.

"I have received information saying that Google will leave China on April 10, but this information has not at present been confirmed by Google," the person was quoted as saying.

As of early Friday morning, Google had yet to confirm the Monday announcement, or the April 10 exit date.