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China: Not So Fast “Googlerola”
Major international mergers and acquisitions typically must be approved by regulators in multiple jurisdictions before they can be consummated. As a practical matter this has historically meant North America and Europe for most Western companies. But as more US-based and European companies expand into China the Chinese government is increasingly getting in on the action.
It seems that Google has so far has neglected to inform Chinese regulators of its intention to buy Motorola (for $12.5 billion) and seek their approval accordingly. Reuters explains that “under Chinese laws, enterprises that run businesses in China and that earn annual revenues of 10 billion yuan ($1.55 billion) globally and 400 million yuan in China must seek government approval for a proposed acquisition.”
This was an oversight clearly and Google will likely rectify it in short order.
In the recent past Google has been ambivalent about China and struggled to remain there while remaining true to its principles. However would-be Google division Motorola has aggressively embraced the Chinese market and enjoyed success there.
When Google got into conflict with China over Gmail hacking last year and threatened to exit the country over its censorship rules Motorola didn’t miss a beat and said it would use Bing as the default search engine on its smartphones in China. The following statement was from a March 2010 Motorola press release:
Motorola, Inc. today announced a global alliance with Microsoft Corp. to deploy Bing services on Motorola devices powered by Android. This new offering, launching in China on smartphones in Q1, will provide consumers a choice when using search and map functions on their Android-based devices. With this collaboration, consumers will enjoy a pre-loaded Bing bookmark on their mobile browser and an enhanced search widget with Bing integration . . .
Obviously Motorola’s relationship with Microsoft will change should the “Googlerola” acquisition be approved. And, if so, it wouldn’t surprise me if future Android smartphones in China said bye-bye to Bing.