Google sees substantial revenue growth in China

BEIJING, Apr 12 (Reuters) Google Inc. expects substantial revenue growth in China, a market the Internet giant sees among its most promising but one in which censorship laws run counter to some of the firm's core values.

''I don't know where (Chinese) revenue growth will be, but it will obviously be large,'' Eric Schmidt, Google's chief executive officer, told Reuters on the sidelines of a news conference on Wednesday.

Supporting that growth will be more than 100 software engineers that the company plans to have working by this summer at a new research and development centre in China, a number that will grow to ''eventually thousands'', Schmidt said.

''You have an enormous number of computer science and smart people here who are Chinese and want to stay in China,'' he said.

''But there are relatively few companies that are trying to build worldwide R&D centres here, so we have been able to attract the top people.'' Google came under fire in February from U.S. legislators and Chinese dissidents for agreeing to block links about sensitive topics, such as the 1989 anti-government protests in Beijing's Tiananmen Square.

But Schmidt said Google had a responsibility to abide by the law in every country in which it does business.

''It is important to operate Google's worldwide service based on local law and local custom,'' he told the news conference.

''It is not an option for us to broadly make information available that is illegal or inappropriate or immoral,'' he said.

Google executives have said that opting for self-censorship was a tough decision but the lesser of two evils for the firm.

Schmidt said Google saw China not only as a market for its Web search services but also as a global research centre.

''We believe the engineers that are working here will be building products not just for China but in fact for the world as a whole,'' he said. ''There is such a large amount of technical talent that wants to play at the world stage.'' Google is developing partnerships for advertising and other businesses but is awaiting licences and regulatory approval before launching any new ventures, executives said.

Earlier this year, Google denied local media reports that it was operating illegally because it had not obtained the proper Internet content provider licence needed for China.

Regulators never took any action against Google, which has licence arrangements similar to those of rivals Yahoo Inc. and EBay Inc..

REUTERS PV PM1652