Ahead of the Bell: Google’s threat boosts rivals
NEW YORK (AP) — News that Google Inc. may pack up its operations in China boosted shares of its Chinese rivals Wednesday.
China’s largest search engine, Baidu.com, soared $61.01, or 16 percent, to $447.50 in premarket trading. Another competitor, Sohu.com Inc., was up $3.52, or 6.1 percent, to $61.65.
In an unexpected turnaround, Google said late Tuesday that it would stop censoring its search results in China — and may pull out of the country entirely — after a series of cyber attacks originating in the country against human rights activists and U.S. companies.
Google is only allowed to operate in China under rules that keep certain pornographic and politically sensitive material out of its search results.
Pulling out would not take a very big bite out of the company’s earnings, but it could leave much more room for its rivals in a growing market.
Google does not have the dominant hold on the search business in China that it does in the U.S., but it’s got a sizeable chunk, handling about 29 percent of search queries there, according to Analysys International. Baidu.com processes about 62 percent of search results in China.
Google shares lost $10.70 to $579.70 in Wednesday premarket trading.