The meaning of Google VS China

January 13, 2010

Yesterday Twitter and the world was rocked by Google’s extraordinary announcement that a coordinated Chinese attack on their sites, and in particular the Gmail accounts of Chinese and Western human rights activists, had been the straw that broke the camel’s back, and that they’re now thinking about getting out of China entirely. This is huge, unprecedented news. No Western company has ever thrown down the gauntlet at the Chinese government.

Back when China — and US corporations including Google — were getting hammered over the Beijing Olympics, I already thought that Google should pull out of China, or at least threaten to do so, because they weren’t going to win there, and it wasn’t worth the cost, as well as the PR and government relations headaches. And who knows, maybe they did it privately. (See, this is why I opened this blog. Instead of saying I had an idea, which nobody will believe, I could point to an actual post.)

Anyway, there are basically two ways to look at Google’s move here:

  • Google cares about human rights, cares about its “don’t be evil” motto, thought it was doing more good than evil by participating in the opening up of China, but is now fed up by the government’s abuses.
  • Google is getting its ass kicked by Baidu all over the place — Baidu’s market share is 75-80% to Google’s 15-20% — and so they’re cutting their losses and dressing it up as concern for human rights for marketing purposes.

(There’s also a third way, which is that this is just an opening salvo of hardball negotiations about Google’s impediments in China. But I don’t think so. The Chinese government always, always calls bluffs (it even called Khrushchev’s nuclear bluffs). Furthermore, negotiations via PR might be great if you’re trying to fill a prime time slot, but in China they’re a big no no. Google has caused the Chinese government to lose face, which is a very, very big deal there. Of course I could be wrong, but I think Google is dead serious about leaving China.)

So which is right? The goody-two-shoes explanation or the cynical explanation?

Actually, it’s both.

It’s both, first of all because each explanation has as its core the same actor: the Chinese government. The Chinese government is behind the human rights abuses in China, obviously, but it’s also behind Baidu’s stunning success. Two things make Baidu so successful: it’s the best place to look for porn, and it’s the best place to look for pirated MP3s and movies. Both things are illegal in China, but the law is only enforced against Google (and Yahoo!). Furthermore, behind the Great Firewall of China, there is no net neutrality. The government decides whose servers go fast, and whose go to a crawl. (To be sure, Baidu also has a bigger sales force that is more adept at talking to Chinese SMEs who are big online advertisers, but something tells me having 80% market share and the government’s implicit backing doesn’t make their life harder.) So to sum up, the Chinese government’s repressiveness and Google’s failure in China aren’t two different issues — they’re two sides of the same coin.

Second, because this is obviously a decision that comes from the Triumvirate, and human beings don’t make decisions for clean-cut, rational decisions. I’m sure that Larry and Sergey believe in the “don’t be evil” motto, and genuinely believe they make the world a better place at Google (human beings are stunningly talented at convincing themselves than what’s in their best interests is morally desirable). They’re getting their asses hammered all over the press over their marketshare, over privacy, over their role in the collapse of old media, and they want to show to the world that they’re still good, damnit. And at the same time, they know that is a huge money sink, a huge time sink, a PR nightmare, and they know they’re never going to crawl out of the hole . Unlike Google, Yahoo! has been spinelessly giving in to every Chinese government demand and has only done marginally better for it.

I would’ve thrown the towel as well.

After all, owning 5/6ths of the world ain’t all bad.

(P.S. Check out @wikileaks for the credible-conspiracy-theory angle to all this.)


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