Archive for March, 2010

Google has censorship balancing act outside China (AP)

Wednesday, March 31st, 2010 | Finance News

SAN FRANCISCO – Google Inc. didn't stop wrangling with censorship when the company moved its search engine out of mainland China to shed its restraints on what can be shown on the Internet.

Even in countries Google has no intention of leaving, the world's Web search leader has been under increasing pressure to filter information. For instance, local laws prodded Google to help shield Turkey's founder and Thailand's monarch from public ridicule by blocking unflattering videos of them in their home countries.

The company also complies with laws in Germany, France and Poland that force it to exclude information that promotes or supports Nazi causes. Google has edited discussion forums in India to remove comments that the government flagged as violations of its restrictions against speech that's indecent, immoral or threatens public order.

The censorship demands often thrust Google into a tricky balancing act. Its pursuit of higher profits from international markets has entangled the company in vastly different cultures and laws that conflict with its idealistic crusade to make the world's information "universally accessible." Even as it censors some information, Google says it's fighting to ensure that the Web's most popular gateway doesn't also become the Web's main muzzle.

"We are fundamentally guided by the belief that more information for our users is ultimately better," said Nicole Wong, Google's deputy general counsel.

After four years of censoring search results in China, Google finally abandoned the effort last week. That decision was driven not only by the extent of Chinese censorship demands but also by hacking attacks traced to China on Google, at least 20 other U.S. companies and human rights dissidents.

But the censorship compromises seem likely to continue in other countries.

And even when Google resists censorship requests, its search engine and services can be cut off in a growing number of countries that are erecting barriers similar to the so-called "Great Firewall" that China has built to prevent traffic to its list of forbidden sites.

Access to Google's services have been blocked at some point in at least 25 of the 100 countries where they're offered, according to the company.

In some countries such as Spain, the barriers have been limited to a few Web pages that were barred under a court order. Other countries are far more repressive, with some of the most pervasive interference occurring in Iran, Vietnam, Bahrain, Saudi Arabia, Kuwait, Burma and China, according to evaluations by the Open Net Initiative, a partnership that tracks Internet censorship. Google also worries that Australia's government is going overboard with a proposal that would require Internet service providers to weed out information.

Microsoft Corp., Yahoo Inc. and other major Internet companies also must grapple with such demands. Google, though, is the biggest target because it processes about two-thirds of the world's search requests, and its YouTube service is the top spot for sharing video, with more than 500 million videos.

The flood of content has coincided with more people connecting to the Internet, giving governments even more desire to control the medium.

Except for child pornography, which is generally illegal even to possess, Google doesn't proactively screen content to determine whether it should be included in its search index, according to Wong. Instead, she said, Google makes an assessment after it has been notified that it may be breaking a country's law.

"We reactively remove (content) because countries and the regulators are in a better place to make the evaluation than we are," Wong said. "It's a better system to have them identify what they believe violates their laws than for us to try to guess."

When Google honors a government request, Wong said the company prunes as little information as possible. For instance, even if Google takes down a link to a Nazi site on its German search engine,, it won't necessarily remove the material in another country, such as France, governed by similar laws. (And given the worldwide nature of the Web, Google couldn't keep a German Internet user from seeing the material elsewhere, such as through the U.S.-based

Google also alerts its users when material has been omitted. For instance, a recent search in France for a white supremacist site included a note stating that 16 results had been removed to honor a legal request. Google referred people to, a site that fights for free speech.

Notices also pop up in the United States to explain why Google doesn't censor results that offend some people. People who enter "Jew" in Google's search box will see an in-house ad that points to a page where Google apologizes for listing an anti-Semitic site.

Google is far more likely to remove material from YouTube and other content-sharing services it runs, such as Orkut and Picasa, than from its search index.

The company's guidelines in these forums generally prohibit nudity, hate speech and extreme violence. Those restrictions often jibe with the laws in some countries, making it easier for Google to submit to certain censorship requests.

Google relies on its users to identify videos that may violate the guidelines. Once it's notified of a potential problem, the company's own reviewers make a judgment call about whether to remove offending clips.

It doesn't always happen fast enough to satisfy some countries, as Google recently learned. In February, an Italian judge held three current and former Google executives criminally responsible for a 2006 video that showed a group of bullies tormenting an autistic teenager. The clip was watched about 5,550 times before Google removed it.

Google is appealing the judge's verdict and still feels comfortable enough with Italy's Internet laws to remain in the country.

Lauren Weinstein, co-founder of People for Internet Responsibility, which fights for free speech and privacy rights, and Robin Gross, executive director of a civil rights group called IP Justice, both said they admire how Google has navigated its global censorship challenges. But Weinstein worries that even limited cooperation with government restrictions will encourage more censorship demands.

"If you give an inch to some of these governments, the next thing you know they want a mile," Weinstein said. "What happened in China is just the beginning, not the end for Google."


AP Business Writers Greg Keller in Paris and Colleen Barry in Milan, Italy, and Associated Press Writers Ciaran Giles in Madrid, Spain; Marco Sibaja in Brasilia, Brazil; and Ben Stocking in Hanoi, Vietnam, contributed to this report.


Fed official: record low rates still needed (AP)

Wednesday, March 31st, 2010 | Finance News

WASHINGTON – Rock-bottom interest rates are still needed to aid the economic recovery, but there's a chance that the Federal Reserve may have to start raising rates before the nation's unemployment rate drops significantly, a Federal Reserve official said Wednesday.

Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said the Fed is right to pledge to keep rates at record lows for an "extended period." But he — as Federal Reserve Chairman Ben Bernanke did last week — said that doesn't mean a specific time period or number of meetings. Some analysts have taken it to mean around six months.

After suffering from the worst and longest recession since the 1930s, the economy seems to be on a path for moderate growth, a little below a 3 percent pace for the January-to-March quarter, Lockhart said in a speech to business people meeting in Hartford, Conn.

"It's quite possible the recovery could be well advanced before any significant reduction of unemployment materializes," Lockhart said. "It's also quite possible circumstances justifying the start of a cycle of policy tightening will develop well before the unemployment rate has found a satisfactory level," he added.

The unemployment rate now stands at 9.7 percent. The Fed, along with many private economists, predict the jobless rate will stay high over the next two years because economic growth won't be robust enough to drive it down quickly.

Economists estimate that employers added around 190,000 jobs in March, in what they hope will be the start of consistent payroll gains. If they are right, it would mark the biggest jobs gain in three years and only the second month since the recession started in December 2007 that the economy actually added jobs.

The government releases its employment report on Friday. Analysts think the jobless rate will stay at 9.7 percent for the third straight month.

Looking ahead to Friday's report, Lockhart said, "All things considered, labor market trends appear to be headed in the right direction."

Lockhart indicated that the Fed shouldn't keep holding rates at low levels until the unemployment rate drops to where it was before the recession_ around 4.5 percent, a rate that many analysts believe is better than normal. "Calibrating monetary stimulus to a goal of bringing unemployment fully to pre-recession levels would be a mistake," he said.

Many economists say it will take at least until the middle of this decade for the situation to get back to normal, meaning a jobless rate of 5.5 percent to 6 percent. It will also take years for the economy to recover the 8.4 million jobs wiped out by the recession, they say.


Russia to borrow for 1st time since 1998 default (AP)

Wednesday, March 31st, 2010 | Finance News

MOSCOW – Russia is likely to raise money on capital markets in late April for the first time since it defaulted 12 years ago as it faces a swelling budget deficit, the finance minister said Wednesday.

After the default in 1998, Vladimir Putin made a point of paying off the country's massive Soviet-era debt and avoiding foreign borrowing during his eight-year presidency. Russia repaid the bulk of its debt by 2006.

But the government now is anxious to raise extra cash in order to manage a budget deficit which is expected to reach 6.4 percent of economic output this year.

Finance Minister Alexei Kudrin was quoted by Russian news agencies on Wednesday as saying that Russian officials would meet investors in Asia, Europe and the United States during a promotional tour on April 21-22 before placing eurobonds.

"When the road show is over, we'll make a decision on the placement," he was quoted as saying by the ITAR-Tass news agency, adding that the meetings with bonds investors will determine the timing and the size of the placement.

Kudrin also said that the first part of the sale is likely to be in dollars, but added that Russia is also thinking about selling Eurobonds denominated in rubles.

While the Russian government earlier approved borrowing some $17.8 billion abroad this year, Kudrin noted that Russia will borrow significantly less due to a favorable macroeconomic outlook and a surplus of liquidity on the domestic market.

Russia hired Barclays Capital, Citigroup, Credit Suisse Group and VTB Capital in February to arrange the issue.

Analysts have noted that while Russia does not need cash as badly as earlier thought, the placement is crucial to establish a new benchmark for corporate borrowing for a country which left the market after a default. The bond issue would also help Russia keep its $60 billion rainy-day fund intact in case oil prices collapse.

Russia's economy contracted by 7.9 percent amid the global downturn last year, but has been on a rise since the third quarter last year thanks to strong oil and commodities prices.

Russia's GDP was up 3.9 percent in February compared to a year earlier, and analysts expect it to rise by 2.5 to 4.5 percent this year.

Suicide bombings in Moscow subway and Russia's province of Dagestan left investors largely unfazed as the Russian ruble continued its rise against the dollar and euro, and the stocks posted more gains on Wednesday.