Chinese search engine gains as Google exits
This afternoon, Google did what investors expected it would do all day long: It effectively pulled the plug on its search engine in China.
If you go to www.google.cn, you are redirected to www.google.com.hk, the search engine's Hong Kong site.
Google made the move because it no longer wanted to capitulate to the communist Chinese government's demands that Google censor search results of Chinese citizens.
Stock-wise, it looks so far like Google's loss will be Baidu's gain. Baidu, the state-owned search engine, is Google's big rival in China. Baidu trades on the Nasdaq like Google.
Today, Google closed down 0.45 percent at 557.50, as the overall Nasdaq went the other way, rising by 0.88 percent.
Meanwhile, Baidu closed up 1.77 percent at 579.72 today, beating the Nasdaq's daily gain by more than double.
Consider that for a minute: It costs more to buy a share of Baidu now than a share of Google. Remember the days when Google traded for more than $700 per share? Since the beginning of the year, as this cold war between Google and the totalitarian Beijing government has heated up, shares of Google are down 10 percent while shares of Baidu are up nearly 40 percent.
Baidu will do what Google will not: censor search results for Chinese citizens, keeping out any ideas and images that could possibly stir unrest or otherwise give the Chinese a taste of freedom of expression and other personal liberties.
How will this end? There is a real hunger for Google in China, as my colleague John Pomfret wrote in this recent piece, quoting a biologist who said, "If Google is blocked, we will see nothing but darkness."
Perhaps, as I wrote some weeks ago, Google can do what the U.S. government so far cannot: Make China tear down its Great Wall to the outside world.
Follow me on Twitter at @theticker
March 22, 2010; 5:11 PM ET
Categories: Corporations , The Ticker | Tags: Baidu, China, Google
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