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Daily View: Google and China

Clare Spencer | 09:57 UK time, Thursday, 14 January 2010

Google office in ChinaGoogle said on Tuesday that Chinese cyber-attacks aimed at human rights activists might force it to close its Chinese operations. Commentators consider what Google's motivations were and the wider implications to business.

Sarah Lacy in Techcrunch reckons that Google's decision is less to do with human rights and more to do with business:

"Does anyone really think Google would be doing this if it had top market share in the country? For one thing, I'd guess that would open them up to shareholder lawsuits. Google is a for-profit, publicly-held company at the end of the day. When I met with Google's former head of China Kai-fu Lee in Beijing last October, he noted that one reason he left Google was that it was clear the company was never going to substantially increase its market share or beat Baidu. Google has clearly decided doing business in China isn't worth it, and are turning what would be a negative into a marketing positive for its business in the rest of the world."

Joseph Sternberg in the Wall Street Journal agrees, saying Google is just the highest-profile of many businesses that have judged business in China as not worth the trouble:

"Even in a market with around 338 million Internet users (an estimated 30 million of whom use Gmail), that position translates into annual revenue of a few hundred million - peanuts compared to world-wide revenue of $22bn."

The Independent leader column expresses disbelief at the idea that Google is pulling out of China for financial reasons:

"Google might not be the market leader in China, but it still makes money there; $600m according to some estimates. Moreover, the Chinese market is growing rapidly. If Google follows through on its threat to pull out, it will mean foregoing long-term strategic opportunities for revenue growth."

Bill Bishop is an American CEO of an online games business in Beijing. In his blog DigiCha, he says Chinese partners of Google such as China Mobile have taken it badly:

"I don't see how Google can not pull out of China now. Even in the very unlikely event that, after publicly staring down the government, Google gains enough concessions to decide to stay in China, who in China will want to work them? Given the suddenness of the decision and the apparent disregard for its partners, Google now looks unreliable and untrustworthy to anyone who might consider working with them."

Kara Swisher at All Things Digital says the real motivations of Google are irrelevant - what matters is the effect it will have on the future of business between technology companies and China:

"How far Google execs are willing to take this fight with China will determine how well they sleep in the future. But good for them for beginning this move, which is critical to the Web evolving globally as a free, unfettered and transparent force.
Most of all, we should only hope that Google's actions spur other tech companies to try to change China the only way its government understands."

Former diplomat George Walden writes in the Times that China should accept the offer to re-negotiate its deal to provide a non-filtered service:

"China is a country, if ever there was one, that can afford to trust its people's patriotism. Let's hope that it does the intelligent thing, tempers its reaction, and gets into quiet talks with Google."

The Guardian editorial proposes that how China chooses to deal with Google will have an effect on its economic position across the world:

"The episode demonstrates the absurdity of the project: the great firewall is a folly which can never be made to co-exist with the demands of becoming the world's largest exporter. Let it crumble, and soon."

Chinese blogger Michael Anti told the BBC World Service that if Google's services are blocked within China they will still be able to access it:

"We cross over the wall ...for example Twitter is blocked in China but we still use proxy, use the VPN, to cross the wall."

Links in full

IndependentIndependent | Google is right to stand up to Chinese authorities
IndependentStephen Foley | Independent | So is it about the ethics or the money?
TelegraphTelegraph | Gesture politics from Google, but will it make a difference?
TimesGeorge Walden | Times | Google was right to do a deal with Beijing
GuardianGuardian | Great firewall of China: A colossal folly
GuardianXiao Qiang | Guardian | Google prompts soul-searching in China
AtlanticMarc Ambinder | Atlantic | Google's Decision: What It Means
Tech CrunchSarah Lacy | Tech Crunch | More about Business than Thwarting Evil
see alsoBill Bishop | DigiCha | What About Google's Chinese Partners?
Wall Street JournalJoseph Sternberg | Wall Street Journal | The China Calculation
All things DigitalKara Swisher | All Things Digital |The Real Point is China's Appalling Internet Behavior
BBCMichael Anti | BBC World Service

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