Google threatened by Chinese advertising firms

Seven Chinese ad resellers whose contracts with Google have been terminated are threatening to take legal action against the search giant.

The companies are seeking compensation for the loss of income which will occur when the contracts end next month.

The agencies have also accused several Google China employees of corruption and have asked the company to investigate the matter, reports the state run China Daily.

Google reportedly terminated the contracts without reason making the search giant's tenure in China even more uncomfortable, following several unseemly spats with the country's Government.

A spokesGoogle told China Daily that the company is not in the habit of discussing individual cases and added, "There are a variety of reasons why we choose to end relationships with certain partners".

The agencies believe that Google suddenly realised how much money they were raking in and decided to put the contacts back out to tender, with a bigger slice of the pie going into the company's bulging coffers.