Google and China at odds as Wall Street worries
Wall Street worries as Google threatens to pull out of China after a series of cyber attacks and continued censorship by the Chinese government. Now the events are threatening US technology investments in China and could have widespread affects.
In the case of Google, China accounts for only a fraction of its current business, roughly $300 million to $600 million in annual revenue, or less than 5 percent of its total, analysts estimate. The bigger concern is what a withdrawal would mean for Google's future prospects, given the size of China's market and the potential for advertising sales there.
"For investors this is clearly a negative," Broadpoint AmTech analyst Benjamin Schachter said in a research note. "The obvious concern is that China's growth has been solid and its market potential is enormous."
"If Google were to exit China, we believe this represents a significant lost growth opportunity in the long term," UBS analyst Brian Pitz said in a research note. "China is the world's largest Internet market with roughly 298 million users, with only 22% of the population penetrated."
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