Tuesday, January 12, 2010

Google pulling out of China?

Just read this news, to be honest, it was a shocker. Will post more thoughts later.

As the world learned about Google's decision to pull out of China (if they don't come to agreement with Chinese government on un-censoring Google search engines) and reacted in all sorts of different ways (most of them expressing a notion of surprise), I finally got my thoughts together and came back to write it down here.

What do I think? Well, let me start with what do I feel. I discovered Google while I was still in high school in China and have been using it since. It was love at first sight. The simplistic design, the speed and the superior performance at searching relevant information have made me a royal user since day one. Although I haven't got many chances to use google.cn (as it was just google.com before Google entered China), I have no doubt that despite the fact that google does not hold the majority of the search market in China, it has given Chinese users tons of information and awesome free services over the past four years. So hearing that Google is leaving, is saddening, especially for Chinese Internet users.

On the other hand, I admire what Google did, although I still don't understand the real reasons behind their decision. Google has done something no other major US corporation has done before, which is to challenge the Chinese government, on an extremely sensitive issue, and in such a public way. For those who are not familiar with China and the way things are done there, the government-business relationship can make or break a company, any company wishing to do business in China. And the second key point is, while Chinese government is very open on the economic front, it certainly doesn't tolerate anything that interfere with how they rule the country. So even though Google didn't say for sure they are leaving, to make a statement like that in a blog~ without talking with the Chinese government before, is an indication that they are ready to pack up and leave. I would be very surprised if Chinese government works something out with Google regarding censorship.

What I don't understand, is the business rationale behind this decision. It is true that doing business in China was frustrating for Google and dealing with Chinese government doesn't help with Google's global (or mostly Western) image. But just as one blogger asked "Will Google make the decision to leave if its market share in China is 70% rather than 30%?". What about the potentially huge smartphone market that just started to gain momentum in China? With Nexus coming out, is Google really willing to give up all that potential? Does it really come down to their adherence to their motto "do no evil"? or is it an act of well thought-out strategic plan?

The bottom line is, I hate to see Google leave. If I am in one of the ethics class in b-school, I will make an argument that Google has made before, that the benefits of doing business in China outweighs the compromises. This is not just from a business point of view, but also from the heart of a Chinese person who really hope the best for her home country. Yes it's not ideal that Chinese can't search about the Tiananmen Square incident or investigate for themselves if Dalai Lama is good or evil, but the presence of Google still brings the wealth of the world's information and knowledge to Chinese citizens. And that presence can help China advance, both economically and socially, slowly but surely. And now with Google leaving, we are left with Baidu, a great local search engine for gossips and social news, but by no way comparable to Google at finding information for English searches (the intellectuals and business people will really hate this....). Plus Baidu has tight relationship with the government, so there goes the hope of changing the freedom of speech in China.

In conclusion, I want to share a few articles on this story (thanks Hari for one of the article). Take a look yourself, and tell me what you think of this whole story. I think this is the kind of discussion that I will find particularly invigorating in bschool.

The official Google blog announcement

Reuter's article, more on the political implication, very interesting perspective
U.S., Google and China square off over Internet

TechCrunch Artile, very good insights

A Tsinghua Professor (American)'s blog post, offered some new development on the story and his perspective (thanks Hari)


  1. I'm also quite surprised with the news. Its going to be a lose-lose situation. Google in danger of loosing a huge potential market and China in danger of loosing its online web reputation which might start a chain reaction with other companies. Here is another perspective written by a Professor at Tsinghua University http://bit.ly/4sM31G

  2. The Economist's take on this is that Google might be pulling out because its losing money in China - this uproar was the excuse it needed to back out gracefully. Not sure I fully agree, but its worth a read http://bit.ly/4vxuQh

  3. Without getting political, there has been a lot of buzz on the Web on Internet restrictions and censorship in China, especially after Google threatened to pull the plug last year, find about the the current conditions there now in 2011 from a social media blogger's prespective.

    Read the full blog post @ http://bit.ly/glL4tN