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Google vs. China — Who's Got the Most To Lose?
Barence writes "Google looks set to pull out of China, but who will suffer most? The search engine or China? At last week's South by Southwest conference, Kaiser Kuo, a former director of digital strategy for the Ogilvy & Mather advertising agency in China, gave an illuminating talk that examined the history of Google and other Western internet firms in China, their relationship with the Chinese Communist Party (CCP), and the likely outcomes of the current stalemate. Kuo explained that Google had earned the respect of the tech-savvy urban elite by protecting users, making censorship clear and by protecting its employees in China. That means Google is walking away from a 35% market share, which contains a far wealthier demographic than local provider Baidu. The Government, meanwhile, which has been very pro-competition, is about to hand a complete monopoly to Baidu, harm its international standing and the development of net technologies in the country. Is it a lose-lose situation?"
the Chinese people.
Google loses, Baidu wins, and China doesn't give a damn either way. All those Google China employees will likely just move their skills over to Baidu (assuming they were locals to begin with and probably many of the ex-pats as well) and take what they know with them when they do. Baidu gets an automatic monopoly, no matter what Google's current market share, and China, or specifically the CCP doesn't care because they still get what they want- the look of being the caring provider that "supports competition" while still controlling the flow of data.
"Growing old is inevitable; growing up is optional."
Not even a link to a story yet, but the ticker on the BBC News home page is reporting that Google has announced that it has stopped censoring its search engine in China. Since China has already made her position clear on this eventuality I suppose this must mean that Google believes that it might as well be hanged for a wolf, than a lamb.
I'm nipping out for some popcorn; the next couple of days are going to be really interesting...
UNIX? They're not even circumcised! Savages!
I mean, without China, there's only 5.5 billion people left in the world to cater to. How can they possibly get by on such meager numbers?
Google is now redirecting to uncensored results via Google.hk, and they have a page showing what services China is blocking so they can track it in a transparent way. Take a look: http://www.google.com/prc/report.html#hl=en
That number sounds about right.. just google it.
Second result in google from over a year ago breaking 30%
~Mekkah
Google is a business, like any other. Do you think that they haven't run a CBA on this move? While the Chinese population is large, the viable market for Google's products is not. How many people in China have regular internet access? How many of those have disposable income to spend on things they see in advertisements? How many Chinese companies that market locally are going to have their profitability affected by search engine advertisements? On the other hand, how much does it cost Google to protect against cyber-attacks from the government? How much does it cost them to lose their trade secrets and IP? How much does it cost them in goodwill elsewhere to remain in business in China, following those draconian laws?
Google is coming out ahead in this move; that's why they made it in the first place. The Chinese government comes out ahead as well, since they gain even greater control over the flow of information within their borders. The only ones who lose are the Chinese people.
There's pretty clear evidence that "Western" companies that hang around China long term tend to develop local competition. It may be that for the next year or two Google will make less profit, but quite likely, after that they will make more profit since the Chinese competition will find it more difficult to steal knowledge from Google if they aren't present in the country.
P.S. your implicit assumption that countries are simply successful in everything they choose to do is just wrong.
=~ s,(.*),<sarcasm>$1</sarcasm>,g if any_point_you_wish();