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.
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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