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Will Internet giants rally behind Google in China?

A Chinese flag flutters outside Google's China headquarters in Beijing

Ng Han Guan

Google Inc. has embarked on a game of brinksmanship in China, saying it may quit the world's biggest Internet market by users after hackers apparently looking for information on dissidents broke into its China site.

The world's dominant search firm may be hoping other search and e-mail leaders, both global and domestic, will rally around it in calling for China to lighten a heavy-handed approach to the Internet that includes frequent censorship and allegations of government-backed hacking.

The move for Google would be relatively straightforward, as its main China businesses are currently mostly limited to search and e-mail, and are believed to account for a relatively small part of its global revenue.

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But global search and e-mail giants such as Microsoft Corp. and Yahoo Inc. , and big Chinese players Baidu, Sina and Sohu have other factors to consider before joining ranks with rival Google.

Following are how some top global and domestic players are likely to respond to Google's attempt to throw down the gauntlet:

Microsoft: Bound by interest in PCs, R&D, search

The world's largest software company has huge vested interests in China and is pumping more resources into the country. Computer sales there now top 40 million a year, many preloaded with legal copies of Microsoft's Windows operating system, the company's core franchise and main breadwinner.

Microsoft has also invested millions of dollars in China, opening a network of research and development centres employing thousands of software programmers, all aimed at showing its commitment to the world's No. 2 market for PC sales.

Most recently, Microsoft has launched a Chinese version of its highly hyped new search engine, Bing, and has said the market will be a top priority.

Given all it has at stake in China, Microsoft could have a hard time withdrawing from part or all of the market, and could be reluctant to take any steps seen as hostile at the risk of endangering its wide-ranging interests.

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Yahoo: Bound by multibillion-dollar stake in Alibaba

Like Microsoft, Yahoo's position in China is complex.

After a largely failed attempt at going it alone in the market, Yahoo invested $1-billion (U.S.) for 40 per cent of Alibaba Group, parent of Hong Kong-listed and operator of two of China's leading online commerce sites.

That stake has since grown several-fold in value, and, despite a sometimes testy relationship, Yahoo chief executive officer Carol Bartz has said her company sees Alibaba as representing its main presence in China.

Given the size of its Alibaba investment and Alibaba's overwhelming reliance on the China market, Yahoo could find it difficult to take a tough stand against government Internet meddling in China and risk potential fallout for Alibaba.

China Internet majors: Bound by reliance on home market

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China's three oldest major Internet firms, Sina, Sohu and Inc, all operate e-mail services in China and are careful to steer clear of content and other actions that could raise the ire of government censors.

From their original roots as Web portals, all three have diversified into other services, from online games and e-commerce to mobile added-value services and search. Given their almost 100 per cent reliance on the China market, the trio would be the least likely to join hands with any movement by Google.

In the search arena, Google's main China rival, search engine Baidu, self-censors itself in accordance with Chinese law to avoid sensitive, mostly political, topics.

Like Sina, Sohu and NetEase, Baidu would be highly unlikely to join Google in standing up to Chinese censors due to its near-total reliance on the China market for all its business.

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