Google defends cooperation with China

updated 12:11 p.m. ET April 12, 2006

BEIJING - Google Inc. CEO Eric Schmidt on Wednesday defended the search engine's cooperation with Chinese censorship as he announced the creation of a Beijing research center and unveiled a Chinese-language brand name.

Google is trying to raise its profile in China after waiting until January to launch its Chinese-language site Google.cn.  Activists have criticized the company for blocking searches for material about Taiwan, Tibet, democracy and other sensitive issues on the site.

"We believe that the decision that we made to follow the law in China was absolutely the right one," Schmidt said at a news conference.

He said Google had to accept restrictions in order to serve China, which has the world's second-largest population of Internet users after the United States, with more than 111 million people online.

Schmidt also announced the creation of a research center in Beijing that he said should have 150 employees by mid-2006 and "eventually thousands of people."  He said the center is meant to create products for markets worldwide, though he said planning was still in such an early stage that he didn't know what they might be.

Schmidt was speaking at a ceremony to announce Google's Chinese-language brand name — "Gu Ge," or "Valley Song," which the company says draws on Chinese rural traditions to describe a fruitful and rewarding experience.

Talking to reporters later, Schmidt said Google's managers were stung by criticism that they accepted Chinese censorship, but said they haven't lobbied Beijing to change its rules.

"I think it's arrogant for us to walk into a country where we are just beginning to operate and tell that country how to operate," he said.

Asked whether Google might try to persuade Beijing to change its restrictions, Schmidt said he didn't rule anything out, but said it hasn't tried to change such limits elsewhere.  He noted that Google's site in Germany is barred from linking to Nazi-oriented material.

"There are many cases where certain information is not available due to local law or local custom," he said.

Schmidt said China accounts for only a small portion of Google's revenues because the company has only recently obtain a license to allow it to carry local advertising.  But he said the company expects China to be an important part of its future business. Several other big U.S. Internet firms, including Yahoo, eBay and MSN, also have operations in China.

(MSNBC.com content is distributed by MSN. MSNBC itself is a Microsoft - NBC joint venture.)

One possible Google project in China would be to make Chinese books available online in digital form or to use translation software to produce English-language editions, Schmidt said.

He said the Beijing technical center could quickly become Google's biggest outside the United States, surpassing its European lab in Zurich, Switzerland.

Chinese universities "are now churning out a very large number of very, very good programmers," he said.  "So we are moving quickly now to hire the best and the brightest."

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