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But it could be a face-saving way to exit a market where Google has made surprisingly little progress. Most research companies agree Google controls at most one-quarter of China's search market. That's hard to swallow, given Google's dominant position in the U.S. and many other major markets.

Google has never been a big believer in traditional marketing anywhere, including China, while Baidu is an active advertiser in TV, out-of-home and digital media.

"Their chief problem was the idea they could come into the market without doing marketing and expect to replicate the miraculous success they had enjoyed in the U.S. They did no marketing," said Kaiser Kuo, a Beijing-based consultant for Youku.com and the former of head of digital strategy at Ogilvy & Mather in China.

As broadcast TV sees ratings erode thanks to new digital methods for consumers to get news and entertainment, the networks are finding it more difficult to come up with the increased fees necessary to license big sports.

As broadcast TV sees ratings erode thanks to new digital methods for consumers to get news and entertainment, the networks are finding it more difficult to come up with the increased fees necessary to license big sports.

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Hardest hit was feature-film production, which had been steadily falling over much of the last decade as L.A. lost jobs to Canada and, increasingly, other states such as New Mexico, Louisiana and Michigan that offer lucrative tax credits and rebates to filmmakers. California's newly adopted film tax credit program helped to blunt the downturn, with production activity increasing by double digits in the second half of the year. About 50 productions have qualified to receive about $100 million in tax credits since the state program debuted this summer