At-risk firms demand Google compensation plans

SAN FRANCISCO - Google received demands from advertising agents in China to provide compensation plans for companies threatened to go out of business by a possible shutdown of the US company's website in the country.

Google should disclose plans to compensate agents relying on the company, their workers and customers, according to a letter addressed to John Liu, vice-president of sales for greater China, posted on state-run Chinese broadcaster China Central Television yesterday.

Google has received the letter and is reviewing it, spokeswoman Jill Hazelbaker said.

"We have been suffering losses every day and daily business has been almost zero, so we need your response," according to the letter, which CCTV reported was on behalf of 27 Google agents.

"We can't accept any suggestion by Google that this is a purely commercial move, or that our clients, staff and investors must accept the business risks."

The letter highlights the possible ripples from a pullout of Google, which said two months ago it would stop censoring web results in China even if that would lead the owner of the world's most-used search engine to shut down its website in the country.

The company's fate in the country may be decided this month as internet-service licences in China come up for renewal.

All internet service providers in China must have their licences reviewed by the Ministry of Industry and Information Technology in March, though the agency may extend the reviews for some companies into April, Shawn Zhao, Google's managing counsel for greater China, said.

Jessica Powell, a Tokyo-based spokeswoman at Google, declined to say if Google plans to renew its licence.

Google said it would stop censoring results following cyber attacks on its Google.cn website that originated in China. The conflict has raised concerns about the treatment of foreign firms operating in the country.

"All the multinationals face a lot more pressure compared with local companies," Elinor Leung, head of telecommunications and internet research at CLSA in Hong Kong said in January. "If you go against the Government, it's not going to make your life easy."

Google's possible withdrawal would have no bearing on the overall environment for foreign companies operating in China and would be an "individual business act," Chinese Foreign Ministry spokesman Qin Gang said yesterday.

- BLOOMBERG