Big changes in Google’s China strategy
Google China apparently was the target of a “highly sophisticated and targeted attack” on their corporate infrastructure last month which was successful in the theft of some Google IP. Google claims that the attacks were targeting the information of Chinese human rights activists. Significantly, TechCrunch has reported that:
In light of the attacks, and after attempts by the Chinese government to further restrict free speech on the web, Google has decided it will deploy a fully uncensored version of its search engine in China. This is a major change: since January 2006, Google has made concessions to the Chinese government and offered a censored (and highly controversial) version of its search engine at Google.cn. Google isn’t playing that game any longer. Should the Chinese government decide that an uncensored engine is illegal, then Google may cease operations in China entirely.
Google has clearly had enough and has decided to take a stand. Google’s CLO has written:
We launched Google.cn in January 2006 in the belief that the benefits of increased access to information for people in China and a more open Internet outweighed our discomfort in agreeing to censor some results. At the time we made clear that “we will carefully monitor conditions in China, including new laws and other restrictions on our services. If we determine that we are unable to achieve the objectives outlined we will not hesitate to reconsider our approach to China.”
These attacks and the surveillance they have uncovered–combined with the attempts over the past year to further limit free speech on the web–have led us to conclude that we should review the feasibility of our business operations in China. We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China.
The decision to review our business operations in China has been incredibly hard, and we know that it will have potentially far-reaching consequences. We want to make clear that this move was driven by our executives in the United States, without the knowledge or involvement of our employees in China who have worked incredibly hard to make Google.cn the success it is today. We are committed to working responsibly to resolve the very difficult issues raised.
The last paragraph appears to be an attempt to provide some sort of protection from persecution for Google employees on the ground in China. Sinister.
China is a tough market. I can’t think of a single US internet company that has successfully broken into China – not Google, Amazon, eBay, Yahoo!, Facebook, or Twitter. China has its own version of each of them (often very similar in look and feel to its US compatriot) and one can’t help but suspect that China is also wielding its censorship laws as a form of protectionism against foreign internet companies. My flatmate is a Chinese national who works as a software engineer for one of those US net companies, and he told me that Chinese companies are known for engaging in dirty, underhanded tactics against American competitors. These tactics are as direct as hacking a website, to more sneaky approaches, such as manipulating search engine results to get a company like Google in trouble with the government censors. These tactics are, of course, unavailable to the US company.
Update (11.10pm): Additional commentary by CIS’ Lauren Gelman and on Chinese Law Prof Blog (via @avstand), and a semi-contrarian view by River Crab Society who thinks that “China is far too big a market to ignore”.
Of course, Google has historically struggled against Baidu in China. If they’ve had enough of the foul play from its competitors and want to exit from the market, then this is a great way to do it – exit not with its tail between its legs, but exit gracefully by making a statement that will resound with the civil liberties people all around the world.
Also, the elephant in the room that no one has called out explicitly (surprisingly) is that the cyber attacks mounted against Google (and other corporates) may have been at the instigation of the Chinese government itself.
7:49pm 
I was shocked when first saw this piece of news. But when I finish reading Google’s official blog, I felt even sadder, both for Google and my fellow Chinese internet users – without Google and other self-discplined corporate/market forces penetrating the politically unpredictable Chinese market, the market would only be further dominated by those of little social / ethical responsibility and those ready to compromise with whatever hidden rules it requires to achieve commercial success in this chaos market.
I am not sure if this is a good strategy for Google commercially (my guts tell me probably not), but I pay my highest respect to their decision.
That’s an interesting perspective Ouou. I think that this effect of the Google pull-out has been overlooked by most people. It’s not just the government that’s doing shady things – it’s also the Chinese companies. By pulling out, the Chinese lose access to a relatively ethically-run service, and it also encourages local businesses to keep doing what they’ve been doing.