So Google have decided to take on China, eh?
Larry and Sergey have apparently decided to take the Party handbook on good PR and government relations, tear pages off and use them as toilet paper.
A few days ago, the Chinese government allegedly hacked into the Gmail accounts of local human rights activists in an attempt to access some rather sensitive information. Doing a U-turn on their previous cooperative policies, Google turned off their search censorship bots and posted what was basically a “F*ck You, China!” post on their official blog.
Now the fight is on, and a number of Chinese citizens (knowing something that the rest of the world doesn’t) have already started marking Google’s gravesite.
Ok, so now the big question that every cynical MBA wants to ask is: is Google really doing this as a matter of good corporate governance, or, seeing as they’re already losing market share, is this really all about money?
I’m not going to answer that – rather, I’m putting up this blog post to say, and this is in a very nice way, “Tough Sh*t, Google.”
There are more internet users in China than there are people in the US, and as long as the Party is here, online content on the Mainland will follow what the Party wants. The big dogs at the Googleplex would know this, but what a lot of regular folk don’t know is that these 370million surfers inhabit a familiar, but oddly alien, parallel online universe.
Have you heard of Tencent’s QQ? What about Taobao? Youku? Not either? How ‘bout Baidu? Well, I’m not surprised. These are all locally developed sites that have taken over virtual turf which was either under- or improperly-developed by foreign firms.
- QQ is the annoyingly popular instant messenger of choice for the Mainland’s office xiaojies who either chat away the work day, or play online farming games.
- Taobao is the local version of Ebay; it offers a wider range of knickknacks at lower prices, and in fact cheapo China-based Ebayers buy their stuff from Taobao to sell overseas.
- Youku is my favorite Chinese website, by far – it’s one part Youtube, one part Hulu, and it’s got “IPR legal issues” and “copyright infringement” stamped all over it.
- Baidu is the country’s top search engine, providing more locally relevant results and more pirated MP3s than anyone else in the market.
Google’s not even making proper coin on their ads here. And like I said, they’re already losing market share to Baidu. Should Google decide to just back out of the country, no doubt it’s going to be quite a big loss for the online community… for about 2 seconds.
Owing to an initial lack of local market appreciation/understanding, foreign internet firms have almost never been successful here. In fact, I can’t think of any foreign company that’s opened a .CN and been successful. If Google moves out, someone else is going to move in almost immediately. And, mark my words; it’s going to be ex-Google employees at the forefront.
Now, money aside, what does Google aim to do exactly? Are they simply trying to buy some goodwill with Transparency and Amnesty International? Or, are they trying to prove something to their stockholders? “Despite what a number of US bloggers would have you believe, we really are not all that evil.”
I don’t get it, really.
Just check the by-laws, employee handbooks and press releases of ANY international company that’s got an office in China and you’ll find that “cooperation and commitment to China and the laws set by the Chinese government” appears on every other page. Players that actually bring real products and real value to the economy like Rio Tinto, and Coca Cola – both of which recently jumped through a few legal hoops – will bend to the Party-line in return for even just a small slice of this rather big pie.
What do you think is going to happen when a company such as Google – which doesn’t provide any tangible product, and whose whole service and value proposition can easily be re-produced by their ex-employees – decides to just pack up and leave? It’s not like intellectual property is all the rage here.
And besides, Twitter, the BBC, Youtube and Facebook have all been blocked, and yet the online community is still standing.
I honestly feel that Google is just digging a big hole for itself. Their previous actions have shown that they are willing to bend their own rules, and that they just might be evil. They originally gave search-censorship concessions to the Chinese Government in return for their own slice of the pie. In fact, they’ve also given concessions to Brazil (to hunt pedophiles), the US (on numerous occasions) and several other countries.
If the main issue here is not being evil, then wouldn’t it be fair to say that the Chinese government was in fact being good? If Brazilians and the Yanks can get information to maintain public safety, why not the Chinese? Also, who’s the say that the Iranians and the Russians aren’t doing the same thing trying to hack into people’s Gmail accounts? Why isn’t there such a big ruckus there?
The Chinese are only trying to keep civil order within their own borders. It’s not like they spent 15% of their GDP to ship out over 100,000 troops and invade North Korea in hopes of finding WMDs, killing thousands of innocents in the process. But then didn’t find WMDs yet just stayed on over for the last 7 years, anyway.
Now that’s something to ponder. Does Google really want to make a point and extend their own set of mores over an entire country just to underline their unofficial motto? They must be gambling on something bigger. They might think that the Chinese government will cave and let Google operate, hands off. Maybe they just want to prove to themselves and to everyone else that at least one big American multinational still has Heart, and that they won’t kowtow to a formerly impoverished authoritarian regime that’s gotten arrogant and power-drunk with the fact that nobody in their right mind would say “No” to 1,500,000,000 customers.
In the end, well, I’m just some student. Larry and Sergey both have enough money to buy my soul 6 times over.
Now, it might not be the perfect analogy, but the thing is, the last time a foreign private corporation went against China, well… we had the Opium Wars.
So, as I said earlier – TOUGH SH*T.
Naveen Venkataraman // Jan 14, 2010 at 7:31 am
Fantastic post Ian.
I agree with you. I’m not sure why Google has all of a sudden decided to “not be evil” in China, but this action doesn’t condone their past actions where they have actively co-operated with the Chinese government. A point to note is that this decision has been taken by Google management in the US and is not Google China’s initiative.
For the record, Google has spoken of human rights activists’ accounts being hacked through phishing and keylogging on the victims’ machines. This keeps happening all over the world with credit card information, but I don’t see Mastercard and Visa stepping back from providing plastic money.
Google’s actions and words smack of plain, old-fashioned hypocrisy. Or maybe, they just can’t handle not being numero uno!
Ian Comandao // Jan 14, 2010 at 9:48 pm
for a more in-depth look at the situation, read this article written by my former roommate:
http://www.foreignpolicy.com/articles/2010/01/14/chinas_foreign_internet_purge
with particular focus on the last paragraph…
no, really Google… you knew what you were getting into! stop acting all surprised. TOUGH SH*T.
Fridays From The Frontline | B-School Admissions Formula // Jan 15, 2010 at 4:03 am
[...] Darden ‘10 Mechanigal joined fellow classmates on a West Coast Job Trek, and continued her love affair with San Francisco. Harvard Gabrielle was generally pleased with her grades for this past semester, explained the school’s grading curve, and went on a holiday cruise with her mother. Darden’ 10 July Dream’s Leadership and Theater class concluded with a 36 hour mad rush to write, direct and perform a play, which a success. Fuqua ‘10 Ian Comando considered Google’s recent decisions in China from a business perspective. [...]
Randy Zwitch // Jan 15, 2010 at 8:55 am
Naveen –
Not sure the Visa and Mastercard situation supports your argument…Visa and Mastercard do actively take attacks on the system seriously, and take whatever action they deem is necessary.
Google, seeing an attack on their servers for very specific information, is calling China’s bluff. If China wants to somehow “deal” with this handful of people by attacking Google’s servers, then Google is saying “we’ll let out a ton of information that you don’t want a billion Chinese to see”.
Ian –
To me, your comments are a reaction that Google’s actions won’t be effective, not they shouldn’t be pursuing them. Basically, since it’s not the profit-maximizing move for Google, they shouldn’t be doing it?
Naveen Venkataraman // Jan 15, 2010 at 10:14 am
Randy,
About the ethics: My point is about Google turning a blind eye to the goings-on for the past so many years and suddenly finding religion. Whatever censorship the Chinese government wanted, Google complied with. So, when Google points a finger at China now, three fingers are pointing back at it.
About the motive: Hack attacks originate from multiple countries across the world. These include malicious attacks to disable services, hacking email services, identity theft and stealing credit card information to commit financial fraud. One can also add state-sponsored intelligence hacks to this list. Why isn’t Google threatening to exit any other country, including the US, which does this?
About Visa and Mastercard: I meant to say that these companies don’t exit a particular country citing hack attacks. Surely, the importance of the services they provide is comparable to Google’s search and other services.
With all due respect to Google as a pioneering internet company, if it exits China, not too many Chinese people are going to be sorry to see it go. Like Ian says, they already have alternatives which they use extensively.
I don’t mean to condone the rights abuses by China or anyone else, but Google trying to portray this as a Good vs Evil setup is just too much. They lost that moral high ground as soon as they started acquiescing to China in the first place.
Let Google explain why they have had a change of heart all of a sudden.
In recent decision on China, Google gets it right // Jan 15, 2010 at 11:02 am
[...] of the issues that Ian often brings up when we discuss China and human rights is the population bomb that China has, that you can’t just unleash all [...]
Randy Zwitch // Jan 15, 2010 at 11:09 am
“About the ethics: My point is about Google turning a blind eye to the goings-on for the past so many years and suddenly finding religion. Whatever censorship the Chinese government wanted, Google complied with. So, when Google points a finger at China now, three fingers are pointing back at it.”
Absolutely agree with that, but at the same time, one bad decision in the past shouldn’t preclude making the correct decision now.
As far as not threatening to leave other countries that try to hack their servers, I agree that Google hasn’t threatened to leave. But at the same time, the Google-China situation as a partnership, which China has actively decided to violate (see my post for a longer explanation).
In this situation, I think Google is making the correct choice overall. Whether Google leaving is any big loss to China since their are alternatives, or Google wasn’t making proper coin their anyway, I think this proclaimation gets to a bigger point: Google has now firmly delineated what they won’t do to make money. There’s plenty of money in selling guns and alcohol, but Google isn’t in that market. Clearly, diamonds are a huge trade with terrible human rights abuses, and Google isn’t there either.
Add “Won’t provide a conduit for Chinese government to suppress its citizens” as another way that Google won’t make money.
Nate Phillips // Jan 20, 2010 at 3:29 pm
Ian -
Since I know you have thick skin I will say this bluntly. I couldn’t disagree more and I interpret this as vividly clear that you have been reading about the situation from the other side of the Great Wall.
1. Where is the backlash? The government hacks private email accounts, blocks social networking sites, and spins news and search results. Our anger should be towards the merciless communist government enslaving miners to find gold for their olympic medals, bulldozing homes without adequate compensation, requiring citizens to live in poverty or pollution, blocking anything spiritual or controversial – from TianAnMen to Catholic authority to Falungong to Tibet. To be clear, I love China and the Chinese people – but I have a very VERY hard time with anything the government does, going back to 1949.
2. Google will prevail. Make no doubt about it. Some markets are more conditioned to certain sites than other markets. Google has a lot of ground to cover in China, true. But show me a company that holds a candle to Google’s power. Android, Gmail, Wave, GoogleEarth, GoogleVoice, Chrome, Nexus, Adsense, translate, ebook, blogger…i think i’m 1/2 way done. The point is, Google is taking over the world – and its only a matter of time before China clued in and followed suit. If it was really a game about market share – do you think Google really would just give up that easily? They haven’t even started yet…and what will leaving do? If Lebron lost a game to YaoMing, he wouldn’t cry and go home. Google will not take its ball and going home, it will play until it wins.
3. China hacked into Google users private accounts. It requires Google to censor its search results. Who wouldn’t be pissed? I’m pissed and I’m not Google. You don’t think the rest of the world looks at the Chinese people in pity? Everyday news breaks of another freedom the Chinese people aren’t able to enjoy. Thousands of protestors braved Beijing 08 and the torch relay, millions more have at home. The government is hated and despised around the world – and it costs Google millions of dollars just to customize their .cn site. I have no doubt Serge & Larry are fired up and trying to find a way to stick it to them. Google global strategy is world domination – and this is exactly in line with their plan.
Ian Comandao // Jan 21, 2010 at 11:28 pm
well, aside from you calling me fat, i agree with just about everything you wrote… i’m not fat. i’m well covered.
seriously though, the main issue here wasn’t China’s human rights issues (of which there are many), nor the Chinese government’s soft power (which, in many parts of the developing world, is better than that of the US) so i’m not going to bite on points 1 and 3.
in any case, the most appropriate statements would be made towards your 2nd point:
- no single company can go up against Google, but no single company needs to. it would be great if you can get your TV to microwave your food and do the laundy at the same time, but even if it did, i doubt if everyone would find it useful. not everyone uses Gmail, not everyone wants to use Chrome.
- China is clued in, so much so that it knows that Google needs it more than it needs Google. why do you think they’re putting so much infrastructure for tech and telecom, and at the same time giving so many concessions to both local and foreign companies who want to play by their rules?
- of course Google’s not going to “just give up”. the whole point was to ask why they’ve decided to play this rather insipid game of chicken, as well as to highlight some of the reasons why (if it should come that that) China doesn’t need Google.
anyway, at the end of the day, China’s a sovereign country. it can do whatever the hell it wants to it’s own citizens, expats, lopats, and foreign corporations.
tao.wang // Jan 31, 2010 at 10:40 pm
Dear all,
As a Chinese, I am extremely surprised that so many people are caring so much on our human rights. Thanks a lot.
However, please do so after you get enough information. Please be noted that the censorship is a request of Chinese LAW, not of the government. An very important feature of CC program is that, you can travel to different part of the world, understanding more the people and the culture there. Then, my question comes to you: do you understand why we have a law to do censorship on internet information? If you feel like, please take it as a CC program assignment and benefit from it.
If I go to your westerner together with a Japanese and a Korean guy, and ask you to live with your retired parents, taking care of them everyday, what will you think? You may react that what is wrong with me, while I arguing to you that in China, Japan, and Korea we value such behavior very much! Don’t worry, I will never do so, for I, not some of you, fully understand that different people have different values.
On the contrary, if some of you want to kick Chinese government’s ass, please do not speak loudly that you are doing so for Chinese. In case Chinese government is not good representative of all Chinese, you neither. Then, if you are doing so for yourself, please spend this precious time on your own home affairs. Now big money is ruling United States again!
As a well-educated Chinese using internet services everyday, I am very happy to share with you guys the real feeling of the majority of Chinese: we lose nothing with Googling’s leave; perhaps, some smart guys among us will get that market share!
tao.wang // Jan 31, 2010 at 10:47 pm
Damn it, I almost forget that I came here to seek advices on Cross Continent MBA, no on Google.
Nate Phillips // Feb 1, 2010 at 6:26 am
Having lived in Taiwan & China for a few years, worked with Chinese immigrants in Canada for a year, and coming from a Chinese undergrad major studying both language, culture, and history…I feel like I come from a place of understanding on this subject.
While I understand that different cultures have different values – basic human rights span political boundaries. All people should have freedom of religion and freedom of speech. While I believe private rights may be forfeited for national security measures – they should not suspended because a scared political party is afraid of losing power. This is very different social norms.
tao.wang // Feb 1, 2010 at 8:50 am
Hi Nate, can you rethink it? Do you fully understand what kind of pressure leads Chinese LAW to censor internet information? Although you lived in China for years, I am afraid that you are just like my boss, a Netherlands expat in China who has limited information access to local media. In this way, the number of years does not speak itself.
The answer I would like to supply to you: Chinese LAW asks for censorship, not by pressure of a scared political party, but by pressure from scared parents. Being a father, I indeed share the same worry many Chinese parents have, there are unlimited amount of inproper information for kid, and many Chinese parents do not have knowledge to stop them! Like Japanese, Chinese organizations, from company, school, to country, are organized as a family. So the leadership has to take full responsibility to take care everyone, at least theoriotically. This is the ground that the parents have to ask help from LAW, which is fullfiled by government.
I am always very happy that I am not “subject” to someone. Do you share this norm? :)
Nate Phillips // Feb 1, 2010 at 3:00 pm
Its funny how you don’t think I have any credentials. You actually don’t know me do you? So lets just stick to the facts:
Blocking obscene material is one thing, and I understand how you can be concerned. But, are you trying to tell me that you believe that PARENTS asked the government to censor search results for ‘Tiananmen Square’, ‘Tibet’ and ‘Taiwan’? PARENTS are asking the government to hack into political activist email accounts? PARENTS want Facebook blocked in XinJiang during the riots?
I know you love your country and your government — but look at the facts and be critical. Just like we can be critical of the US government – lets also be critical of the Chinese government too. They blocked Facebook – just like Iran did after the elections – to stop people from mobilizing. They block controversial search results (tibet, tiananmen) so chinese citizens don’t get mad at them. They hacked into email accounts of activists to stop ANY opposition they might face. Please please please look at the facts and realize that the media you watch and read is also from your government. A news article you watch on TV in China is very different from the same news article seen in the ‘outside’ world because your government spins it. The Chinese will never criticize themselves — so you (a Chinese citizen) will never see the whole truth. Is this good? I know this is hard to understand — but you must be honest. US citizens don’t like to criticize our government, but we do to make sure they are honest. The Chinese people need to do the same.
Nate Phillips // Feb 4, 2010 at 11:16 am
i noticed you stopped responding? did u run out of things to say — or did you get blocked? :)
tao.wang // Feb 4, 2010 at 10:09 pm
I am just wondering whether you have been in China, so that you do not feel the feeling of middle class Chinese nowadays, just like your government. Between China and the US, the observation is in a single way: I read New York Times and Wall Street Journal everyday, maybe you also do. Then I get at least some information about US, and you know nothing abut China today. By the way, I am living in Shanghai. I am afraid that in 50 years’ later, you still only know Tiananmen and Tibet and Taiwan about China, without knowing that the world is running.
The opinion you mentioned about Xizang (Tibet) is funny, do you understand what Dalai Lama is aiming at? Do you know that he wants caesaropapism (not sure whether the right term, the truth is that the Lamas, as monk, want to govern Xizang, as they did before 1950s), and that he wants to drive all people under different religion other than Tibetans out of his “country” if this country comes to true? Please be noted that Chirstians are also included. Please consider if the Pope wants to rule you again, and he wants to force Puritans to leave, will you like it? If you do, why? If you do not like this idea, please rethink. And if you do not know this claim of the Lama, why? Are you BLOCKED?
Do you think you care more about people in Xizang than I do? I disagree with you here. Please imagine, if Xizang goes independant, what will happen? Please remember it is a region without any natural resources to support its people. Now every year, many Chinese people like me are taxed to support Xizang, luckily not you. So you can have such a leisure to blow the Lama, while I have to work hard to make my money for tax. Perhaps I can also dream that I have leave this shit to you, but if this day come, will you like that you are heavily taxed to support them? I bet you do not.
By the way, when talking about Xizang your preference about elected modern government is somehow weakened, instead, you are rather enthusism on an middle-age monk government. If you like it by heart, please organize such a government in your own country, not in Xizang, China.
The opinion you mentioned about Tiananmen is also funny. Although I was just a boy in 1989, but I fully understand what happend at that time, but I also understand that to develope a country needs LAW and
ORDER. The progress in the past 20 years in China are only possible if LAW and ORDER are in place. By the way, why do you have such a strong feeling on Tiananmen? Do you think an elected government should never do so? Do you know the Douglas MacArthur killed several in front of the White House in 1930s? If you do not know, I can give you more information. But, seems that you are also BLOCKED from some carefully selected information, right?
Please refet to Wikipeida (http://en.wikipedia.org/wiki/Douglas_MacArthur), under section Bonus Army. Since this information is blocked in English, I can not find more details. Please do it on yourself. A question: even if the claim is true that communists and pacifists were demonstrating, do you think without trial they could be executed?
The most funny part in your post is that you want to make sure your government is honest: seems that you have made it. Really? Are you kidding me? I mentioned also, now big money is ruling the US. Tea Party, your actions.
Did you noticed another of my post: my purpose of visiting here is to get information of CC program? I have to use my time on develop myself to make more money and to pay more tax to to my country. :) Maybe this is my last post on this discussion, but I promise that I will come back to check your rethinkings.