Here’s Why Google’s China Head Is Off the Hot Seat

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Google Inc. (NASDAQ:GOOG) announced its current China head, John Liu, will step down in mid-August to pursue new endeavors in a statement released Monday. Google said in an email statement that after six years of leading business in China, Liu is departing to pursue “other opportunities” without elaborating. Liu has not responded to a requests for comment from The Wall Street Journal.

Google said its current head of partnerships business in Europe, Scott Beaumont, will take over Liu’s responsibilities.

“Mr. Beaumont will inherit an operation that at this point focuses primarily on advertising services,” Google said. “Mr. Beaumont will continue Google’s focus on helping Chinese business of all sizes grow locally and globally.” The choice is a departure for the company, which for the first time since it opened its China operations in 2005 is bringing in a chief who isn’t a China technology insider.

Beaumont takes over China’s Google operations at a time when the company’s consumer services catered to China have all but ceased. Over the past year, the company shut its China-specific music and shopping search sites, while its search-market share by traffic fell to 2 percent as of June from about 5 percent a year earlier, according to Internet data provider CNZZ.

Liu presided over the company in China during a difficult period. He has been at the helm since the company decided in 2010 to no longer censor Internet searches as required under local law and shifted its operations to Hong Kong. Since then, analysts say government blocks have rendered its services slow and unreliable, and it has lost market share to local search company Baidu Inc. 

In January 2010, Google announced that in response to a Chinese-originated hacking attack on it and other U.S. tech companies, it was no longer willing to censor searches in China and would pull out of the country completely if necessary. In March, the company began to redirect all search queries from Google.cn to Google.com.hk, thereby bypassing Chinese regulators and allowing uncensored simplified Chinese search results.

By March 30, all searching via all Google search sites including Google Mobile was banned in mainland China. Any attempt to search using Google resulted in a DNS error. The ban was lifted the day after. Google ended the automatic redirect of Google China to Google Hong Kong on June 30, and instead placed a link to Google Hong Kong to avoid getting its Internet content provider license revoked.

Google sells advertising space on its search services across the world to Chinese companies looking to target foreign audiences. The company also supplies advertising across a wide range of Chinese websites and helps advertisers figure out where to advertise to hit key demographics.

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