Google is attempting to salvage its operations in China, offering a compromise to the government in return for the renewal of its operating licence. Yet some analysts believe the olive branch will not be enough to save its operation in the country from closure.
Google's top lawyer revealed on Monday night that it had made changes to its Chinese home page to mollify the authorities. Sources close to the company said the move was not a commercial decision, adding that the current revenues from the country were "immaterial".
Ian Maude, an analyst at Enders Analysis, said: "Google is in a difficult place and has come up with an elegant solution. It is unlikely to be favourably received by the Chinese government, however." He added: "The most likely scenario is Google will be blocked."
This marks the latest twist in the extraordinary saga of the internet search giant's operations in China. It has involved cyber attacks, debates over censorship, diplomatic spats and public relations issues as it tried to circumvent the "Great Firewall of China".
David Drummond, the chief legal officer of Google, admitted that increasing access to information for Chinese users while abiding by local law "has not always been an easy balance to strike". This has been especially pertinent this year since the group announced it was no longer willing to censor results on its Chinese site Google.cn.
Currently every internet user who types in the url for the Chinese website is automatically redirected to the search engine's site hosted in Hong Kong, which offers uncensored content. Yet China's authorities are unhappy, according to Mr Drummond, and they have laid down an ultimatum.
"It's clear from conversations we have had with Chinese government officials that they find the redirect unacceptable," he said, adding: "If we continue redirecting users our Internet Content Provider licence will not be renewed."
The group said that if the licence were not renewed when it expires at the end of the month "Google would effectively go dark in China". Google re-submitted its licence renewal application after offering to change the way it operates in the country. It has already started taking a minority of users onto its Chinese site, where the music and text-translation services are available without filtering.
"This approach ensures we stay true to our commitment not to censor our results on Google.cn and gives users access to all of our services from one page," Mr Drummond said. In the next few days it will end the practice of redirecting the site entirely, taking users to a new page which has a link to the Hong Kong site. Insiders said the group was confident it would secure the licence after the changes, but added it would not return to censoring the site to guarantee its operations. Google's legal supremo added: "This new approach is consistent with our commitment not to self-censor and, we believe, with local law. We are therefore hopeful that our licence will be renewed."
One source said it had been a "very tough couple of years for the company in China". The group started operating in the country in 2006, when it agreed to censor the site and was heavily criticised for the move outside China.
At the end of 2009, the company was subject to a cyber attack as hackers tried to spy on human rights advocates using its email system, although it was never explicitly stated that the government was behind the attack. Yet insiders said it had helped prompt the company's decision, in March, to end its censorship. The company is estimated to earn 3 per cent of its revenues from China.