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Google: Tech War In China

It appears Google is going to play hardball with China. The Internet search giant just postponed the launch of two mobile phones in China which use its Android platform, in the first sign its business in the country is starting to be affected by a dispute over hacking and censorship.

The manufacturers of the telephone, which was scheduled for launch in China on Wednesday, are Motorola and Samsung Electronics, and China Unicom would have been the carrier, a Google spokeswoman said.

A source familiar with the situation said Google wanted customers to have a "positive experience" with the product, but felt that would be difficult considering the publicity surrounding the company in China at present.

Google said last week that it and other companies were targets of sophisticated cyber-spying from China that also went after Chinese dissidents, and threatened to pull out of the country.

It also said it no longer wants to censor its Chinese Google.cn search site and wants talks with Beijing about offering a legal, unfiltered Chinese site.

Zach Karabell of RiverTwice doesn't think this is just an example of Google pushing back at Beijing. "It's the latest example of information giants who simply can not gain traction in China because the way of doing business is simply too much woven into the government," he says. "Unless you're there and speaking the language it's very hard."

What’s the trade?

"If you want to play China's growth I'd do it with domestic Chinese new economy companies and old economy US companies leveraged to the growth," counsels Karabell. As a result he suggests the following:

Karabell's New Economy Plays
Sina
Netease.com
Shanda Games

Karabell's Old US Economy Plays (leveraged to China)
Honeywell
Yum! Brands
Nike


Read More
> Google Postpones Cellphone Launch in China


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Trader disclosure: On January 19th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Finerman Owns (AAPL); Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM); Finerman's Firm Owns (BAC), (BAC) Leaps; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm Owns (WFC) Preferred; Finerman's Firm Owns (MCD), (MSFT), (YUM); Terranova Is Short (CMA), (ICE), (ESS), (JCI), (CAL), (AGU); Terranova Owns (QCOM), (MSFT), (DELL), (AAPL), (EMC), (FCX), (FTO), (XOM), (BAC), (JPM); Terranova Owns (POT) Feb. Puts; Terranova Owns (XHB) Mar. Puts

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