google exiting China?

Thursday 14 January, 2010

The potential of Google exiting China has raised a furor lately & begs for my comment.  Here’s the announcement which started the firestorm:  A new approach to China 1st:  we need answers to many questions this post raises:

  • what other large companies were attacked?
  • whom does the evidence indicate conducted the cyberattacks?
  • how long have Chinese human rights activists’ gmail accounts been accessed by 3rd parties & by whom?
  • what specifically were Google’s objectives when they entered China?

Aside from this blog entry, there are a few other issues relevant to this incident:

  • Google’s market success & profitability in China & prospects for the future
  • Google’s U.S. executives familiarity with China

At the risk of commenting before all of the facts come out, here are my thoughts:

  • The implication is the government is behind these cyberattacks, but this should be no surprise, though it’s doubtful explicit links can be proven. That whoever led these attacks went after gmail accounts outside of China is the most egregious act.
  • While these attacks in all likelihood were intended to silence Chinese human rights advocates, attacking their e-mail accounts is a bit tardy. The e-mail messages have already gone out.  Since it’s so easy to open free gmail accounts, hacking these accounts won’t prevent them from speaking out in the future either.
  • Hat’s off to Google for trying to get the Chinese government to loosen its restrictions on free speech on the internet.  But in some ways, I think this is simply grandstanding on Google’s part to exit a marginally profitable market.  They put on the presentation that they are taking the high road, but the situation remains that Baidu holds the same market share over Google in China that Google holds over everybody else in the U.S. & that’s not changing much.
  • I have no doubt that Google’s executives are pretty familiar with how things work in China, but even they should know they probably won’t win when confronting the Chinese government.  I think Google could have much more positive influence by working within the system than trying to buck it.  If Google does leave China, the government will have won, & have 1 less venue to censor.  In some ways, the US government should even lobby for Google to remain.
  • The biggest losers could be Google.cn users in China.  If Google leaves, they’ll have little choice but to revert to the dominant local competitor Baidu.com  Google should stay in China & try to work more closely with the Chinese government to foster change from within rather than from the podium.

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