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Google China Shutdown Almost Certain

Reports indicate that could go dark in a matter of weeks, news that has brightened the financial prospects of Google's rivals in China.

Shares of Baidu, Google's chief rival in China, rose sharply on Monday following reports that Google is almost certain to close its search operations in China, while Google's shares declined.

Baidu shares were up about 3% as of 1pm EST and Google shares were down by the same percentage.

Over the weekend, reports in The Financial Times and The Wall Street Journal said that Google was likely to shut down because Chinese authorities would not change their Internet censorship rules and no accommodation between the Google and the Chinese government had been reached.

Google declined to comment on the reports.

The company in January said it would stop censoring its search results in China following a sophisticated cyber-attack from China that targeted the Gmail accounts of human rights organizations and resulted in the theft of its intellectual property.

The New York Times on Sunday said that Chinese authorities have warned Google's search partners in China that they must comply with censorship laws and that they should make plans in case Google does stop censoring search results, a situation that would likely result in a government-mandated shutdown and service interruption.

According to The New York Times, however, Google is more likely to turn off than to provoke Chinese authorities by flouting local laws. On Friday, Li Yizhong of the Chinese Ministry of Industry and Information Technology (MIIT) warned Google that it will face consequences if it fails to obey Chinese laws.

At a March 2nd hearing on Internet freedom in Washington, D.C., Assistant Senate Majority Leader Dick Durbin (D-IL) praised Google for its decision to stop censoring search results in China and questioned why so few companies in the IT sector were willing to address human rights challenges.

"With a few notable exceptions, the information technology industry seems unwilling to regulate itself and unwilling even to engage in a dialogue with Congress about the serious human rights challenges the industry faces," said Durbin in a statement. "As a result, I plan to introduce legislation that would require Internet companies to take reasonable steps to protect human rights or face civil or criminal liability. I recognize that the IT industry faces difficult challenges when dealing with repressive governments, but Congress has a responsibility to ensure that American companies are not complicit in violating the fundamental human rights of Internet users around the globe."

He noted that the the Global Network Initiative (GNI), a voluntary code of conduct that seeks to guide companies operating in countries that limit Internet freedoms, currently has only three industry members: Google, Microsoft, and Yahoo.

In January, Durbin sent letters to 30 technology companies asking them to participate in the GNI.

Of the companies that received the letters -- Acer, Amazon, Apple, AT&T, Cisco, Dell, eBay, Facebook, Fortinet, HP, IAC, IBM, Lenovo, Juniper, McAfee, Motorola, News Corp, Nokia, Nokia Siemens, Oracle, RIM, SAP, Siemens, Skype, Sprint Nextel, Toshiba, Twitter, Verizon, Vodafone, and Websense -- only AT&T, McAfee and Skype said they'd discuss joining GNI, while Websense said that it would do so if the fee was waived.

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