Google (GOOG) Gmail Blocked in China

Shares of Google Inc. (GOOG) were trading down -1.03 or -0.19 percent to $533.00 per share in premarket trading this morning, after news that China had blocked the company's Gmail access through third parties. The Gmail website had already been blocked, with today's action extending to the Apple (AAPL) app included in Apple iPhones and iPads. Google shares closed at $534.03, up +5.26 or +0.99 percent in Friday's regular trading session.

Mountain View, California based Google Inc. is an international Internet corporation best known for its search engine.
The company has been aggressively expanding into other information technology fields through acquisitions. Its latest acquisition in January was Nest, a company that makes home appliances that connect to the Internet. Google had previously bought DeepMind and military robotics company Boston Dynamics late last year. Google's largest source of profits comes from its AdWords online service. The service places ads at the end of Google's search results.

According to Google's Transparency Report, online traffic from China to Gmail dropped -85 percent on Friday and down to nearly zero on Saturday. Nevertheless, a spokesman for Google Asia Pacific, Taj Meadows told the press that Google had checked its email service, stating "We've checked and there's nothing technically wrong on our end.

A freedom of speech advocacy group, GreatFire.org, said that China's Great Firewall - the world's most sophisticated internet censoring mechanism - may be responsible. A spokesman for GreatFire.org said that, "I think the government is just trying to further eliminate Google's presence in China and even weaken its market overseas, imagine if Gmail users might not get through to Chinese clients. Many people outside China might be forced to switch away from Gmail.

Hua Chunying, a Chinese foreign ministry spokeswoman stated that she had no knowledge of the Gmail block, and that, "China has consistently had a welcoming and supportive attitude towards foreign investors doing legitimate business here, she continued saying, "We will, as always, provide an open, transparent and good environment for foreign companies in China.

Google has had its services severely disrupted since June, the month marking the 25th anniversary of the 1989Tiannamen Square massacre in Beijing on June 4th. While Google services have been blocked, access to Gmail and other Google apps could still be accessed through protocols such as IMAP, POP3 and SMTP, which allowed Gmail communication on Microsoft (MSFT) Outlook and Apple's iPhone Mail.

Virtual Private Networks or VPNs are becoming the only alternative for many China based companies seeking to keep in touch with clients over the internet outside of China. VPNs allow users to access blocked sites and services through virtual tunneling protocols and traffic encryptions.

Google stock is having a feeble reaction to the news, since Chinese censorship of its website and services dates back to 2009, when Google closed its main web portal in China. The stock is trading in the middle of its yearly range and will probably close the year slightly lower than in 2013.

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Published on Dec 29, 2014
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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