Google's Chinese Mobile Ambitions At Risk Amid Search Censorship Spat


China Mobile is the world's largest cell phone company with over 500 million subscribers. It's also supposed to be a key partner for Google (GOOG) as the search giant rolls out its Android mobile operating system in China.

But that arrangement is now in doubt, two days after Google made good on its threat to close its China-based search engine in protest of the government's censorship.

Already, China Mobile's smaller rival, China Unicom, which has about 200 million subscribers, has scrubbed Google search from the company's Android phones, according to the Financial Times

China Unicom Ditches Google

"We are willing to work with any company that abides by Chinese law . . . we don't have any co-operation with Google currently," Lu Yimin, China Unicom's president, told the paper.

In January, days after its threat to leave, Google postponed the release of new phones with Unicom, saying it would be "irresponsible" to move forward. By then, Motorola had already produced 20,000 phones for Unicom's Google project, while Samsung had made 10,000, according to Chinese media.

"Android's share is not significant now, but the opportunity is enormous in a country with over 800 million mobile subscribers," Kaiser Kuo, a Beijing-based tech expert, told The Los Angeles Times.

On Tuesday, The New York Times reported that China Mobile "was expected to cancel a deal that had placed Google's search engine on its mobile Web home page," under government pressure. The paper also said that Unicom "was said by analysts and others to have delayed or scrapped the imminent introduction of a cell phone based on Google's Android platform."

Is China Mobile Next?

Unicom has struck first, removing Google search from its phones, but the real threat comes from China Mobile, which offers over 10 phones that run on Android to its 500 million users. The company has yet to comment on its plans in light of the controversy.

Meanwhile, Tom Online, the Chinese mobile Internet provider, said it had removed Google's search engine from its service.

"Our practice is to work with companies that are compliant with regulations," Elaine Feng, executive vice-president at Tom Online," told Bloomberg News. Tom Online is owned by billionaire Li Ka-shing, one of Asia's richest men, who is close to the Chinese government.

Google is quickly finding out that its decision to stand up against censorship comes at a price -- and that price could the company's mobile business in the world's largest country. As Duncan Clark, chairman of research firm BDA China, toldThe Los Angeles Times, "Google wants to have its cake and eat it, too."

That looks increasingly unlikely. As for China Mobile and its 500 million users, Google better be feeling really lucky.