Google Quits Bending Over For China

By Ben | Wednesday, January 13, 2010 | 5 Comments

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google Google Quits Bending Over For China I find today’s tech news about about Google’s decision to refuse to censor Chinese results to be rather fascinating. There’s talk about how Google is threatening to pull out of China and open up their searches without the filters after they concluded that there were recent security breaches by parties that were under the direction of the Chinese government.

But in what is a great public relations play, Google is maneuvering this into how they’re supporting anti-censorship efforts, when it’s really a business strategy gamble. The threat of Google moving out of China really doesn’t scare the Chinese government at all, and I doubt that it was anything but to incite more loyalty in other parts of the world where Google reigns king; after all, no one comes close to unseating the current Chinese search giant, Baidu, which owns anywhere between 62% and 75% of the Chinese search market share. But it puts Google out in the open on how they’re very annoyed with the fact that their property was violated and instead of keeping quiet about it, they went ahead and spoke out against it.

The Chinese government, on the other hand, is in a position of strength when it comes to the negotiations; there’s not a good reason to back down from a business perspective since they don’t win out anywhere. Chances are that each side will go their separate ways and it’ll allow for the status quo to remain while each side claims victory. In the end, the anti-censorship searches will be short-lived and Google will then be freed from the dog-and-pony show while the rest of the market scrambles to divide up its search shares.

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johnklin

For Google, a Threat to China With Little Revenue at Stake
The New York Times. January 14, 2010
A version of this article appeared in print on January 15, 2010, on page A10 of the New York edition.
"Googleu00e2u0080u0099s business in China, for now, remains small. Estimates put Googleu00e2u0080u0099s China revenue last year at about $300 million, a tiny fraction of its more than $22 billion in global sales. Still, Googleu00e2u0080u0099s investment in China includes building a staff of more than 600 people there, many of them highly paid engineers. And in October, Eric E. Schmidt, Googleu00e2u0080u0099s chief executive, predicted that China would become a dominant market for online businesses, saying that in five years, the Internet u00e2u0080u009cwill be more non-English, it will be Chinese.u00e2u0080u009d Clearly, Google has high hopes for its business there."
http://www.nytimes.com/2010/01/15/world/asia/15...

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bigWOWO

From what I've read, Ahmed is right--the Green Dam thing was mostly over the fact that the software crippled the computers on which it was installed.

I think Google's move is both anti-censorship and pro-business. It gets tiring and expensive for a company to deal with a country that looks over its shoulders at everything it does, requires constant audits and checkups, and dictates how it runs its business. From a business perspective, it's not worth dealing with. I think Google would love to stay in China--after all, there are roughly 1.3 billion potential users in the country--but from a business perspective, does it make sense to divert resources in order to work within the rules of China? Probably not.

I wish I could say with certainty that the Chinese will someday get a free and open internet. It will help common people develop and share ideas. But who knows? China managed to squelch news from the fallout from the Tiananmen massacre; it sadly may be possible for them to squelch news of the exodus of Google as well.

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Ahmed Sanchez De La Cruz Kim

Regarding the Green Dam, I'm not really sure if it's a case of bowing down or because there were problems with the software in general. At least, that's how I've been reading into it.

I kind of understand your last statement. James Fallows wrote a little bit about it here.
http://jamesfallows.theatlantic.com/archives/20...

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johnklin

@MaSir
The Green Dam Youth Escort: Not an Environmentalist u00e2u0080u009cDatingu00e2u0080u009d Service for Young People.
http://www.8asians.com/2009/06/19/the-green-dam...

I agree that if Google had a much larger market share than they currently do in China, they would not have made this stance. But still, to strategically withdraw from China this early in the Chinese Internet I think is a bit premature. Overtime, I'm sure Google could do some decent monetization in China. Google isn't doing so hot in Russia, South Korea, Japan or Taiwan either.

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MaSir

Chinese government has backed down before. I read somewhere that they had backed down when mandating users to install some government-related software after PC users protested.

Will it happen again? I hope so.

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