Sixteen hours have passed since Google shocked the business world with its announcement that it would stop censoring Google.cn, its Chinese language search engine. In those 16 hours, experts, bloggers and commentators have strived to parse exactly what the statement might mean, why Google has made it and what might be the response of the Chinese authorities.
The apparent trigger to the action was the “cyber attack” on Gmail accounts. But Google has always carefully monitored its position in China, and this decision will have been considered for a long time, even if it was done without the knowledge of Google China’s staff. Besides, as one friend who has worked in China and done some research into internet freedom says: “The hacking and industrial spying has been on the radar of governments and businesses for a few years now. ”
So what to make of the fact the company went public with this position, in English, before holding negotiations with the Chinese authorities? The FT’s Richard Waters detects some wriggle room for Google in its official statement, saying: “It may be too early to call this the end of Google.cn.”
But as several others have pointed out, if the company genuinely wanted to negotiate with the Communist Party, this was not the way to start. Sarah Lacy on Tech Crunch parses the move in detail, and says “Google is ready to burn bridges.” She points out the response of Marc van der Chijs, a fellow western technology entrepreneur in China, who says: “If they wanted to solve things this is the wrong approach.”
If they are right, and Google simply wants out of China, why are they doing it? Many have suggested it is for business reasons, and that its revenues from China were too small to matter, and the PR success (among some Chinese people as well as in the West, as Gideon Rachman points out) generated by this story is well worth the sacrifice.
But journalist Om Malik on his blog refers to a JPMorgan note which suggests the move could have more serious long-term financial consequences. The bank note suggests it could have “a far-reaching impact on the company’s overall long-term growth rate”. As one of my colleagues said, owning 30 per cent of the world’s most populous market is not bad, even if it doesn’t yet bring in massive profits.
That leaves two ways to interpret Google’s move: either this is a brave and principled move to stand up for freedom of speech, or Google has bungled its China policy.
It would be foolish to bet against the internet giant, but I can’t help feeling that Google could well have predicted this turn of events and handled the issue with a little more consistency. The decision to pull out, as with so much this company does, has so far been a PR triumph. But will it turn out to be a business triumph?
Lorien Kite is deputy comment editor, a post he took up in 2009 after four years as a commissioning editor on the analysis page. He joined the FT in 2000.
Ian Holdsworth became assistant features editor in 2009 and was previously chief production journalist for the features pages.
What next for Google in China?
Sixteen hours have passed since Google shocked the business world with its announcement that it would stop censoring Google.cn, its Chinese language search engine. In those 16 hours, experts, bloggers and commentators have strived to parse exactly what the statement might mean, why Google has made it and what might be the response of the Chinese authorities.
The apparent trigger to the action was the “cyber attack” on Gmail accounts. But Google has always carefully monitored its position in China, and this decision will have been considered for a long time, even if it was done without the knowledge of Google China’s staff. Besides, as one friend who has worked in China and done some research into internet freedom says: “The hacking and industrial spying has been on the radar of governments and businesses for a few years now. ”
So what to make of the fact the company went public with this position, in English, before holding negotiations with the Chinese authorities? The FT’s Richard Waters detects some wriggle room for Google in its official statement, saying: “It may be too early to call this the end of Google.cn.”
But as several others have pointed out, if the company genuinely wanted to negotiate with the Communist Party, this was not the way to start. Sarah Lacy on Tech Crunch parses the move in detail, and says “Google is ready to burn bridges.” She points out the response of Marc van der Chijs, a fellow western technology entrepreneur in China, who says: “If they wanted to solve things this is the wrong approach.”
If they are right, and Google simply wants out of China, why are they doing it? Many have suggested it is for business reasons, and that its revenues from China were too small to matter, and the PR success (among some Chinese people as well as in the West, as Gideon Rachman points out) generated by this story is well worth the sacrifice.
But journalist Om Malik on his blog refers to a JPMorgan note which suggests the move could have more serious long-term financial consequences. The bank note suggests it could have “a far-reaching impact on the company’s overall long-term growth rate”. As one of my colleagues said, owning 30 per cent of the world’s most populous market is not bad, even if it doesn’t yet bring in massive profits.
That leaves two ways to interpret Google’s move: either this is a brave and principled move to stand up for freedom of speech, or Google has bungled its China policy.
It would be foolish to bet against the internet giant, but I can’t help feeling that Google could well have predicted this turn of events and handled the issue with a little more consistency. The decision to pull out, as with so much this company does, has so far been a PR triumph. But will it turn out to be a business triumph?