March 14, 2010

Google Withdraws from China

A fascinating case of global business ethics leadership has finally come to a head in China vs. Google:
"Google said Tuesday it would shut down its operations in China unless the government there agreed to stop using its search engine for spying or to censor political information posted on it. About 80 million Chinese use Google" (AHN).
The company has long been accused of facilitating suppression of information current and historical (e.g. the Tiananmen Square massacre) the government deems potentially threatening to its firm single-party grip on power.

It will be interesting to see what Yahoo and AltaVista do now. Yahoo even went so far, back in 2007, as to turn over internet search records of at least two Chinese political dissidents, who were jailed as a result.

Interestingly, this marks a 180 degree shift in policy for Google, which also in 2007, voted down an anti-censorship shareholder initiative very much like what the company has finally just chosen to do.

Ultimately, this may not compel China to change its repressive policies. However, it will likely inspire its competitors Yahoo and AltaVista to follow suit. This could in turn work to stigmatize the country from the rest of the developed world. It could also embolden its people to revolt once more in the name of freedom and democracy if, as a result of these corporate actions, it becomes impossible or very difficult for ordinary Chinese citizens to continue doing global business on the internet.

But Baidu, the Chinese seach engine, controls already 63% of the market. So perhaps little will change.

Still, this a refreshing and reassuring act of courageous leadership from a company that is clearly still trying to stay true to its founding motto: Don't be evil.

4 comments:

  1. Wow... I know they were upset. I didn't realize they were at the threat making stage. An old cynic like myself says, there's no way China changes for anyone. Maybe Google has determined India to be a better place to go. Or even Russia... Very interesting.

    Of course, the pollyanna part of me wants them to come back here and do great things here...

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  2. When Google leaves, and potentially others leave as well, what do you suppose will happen? Will the void not be filled by a Chinese company? Or another, lesser portal, willing to compromise? I'm not suggesting that this is a reason (or a rationalization) for Google to stay. But I suppose I'm observing that their decision to leave really creates no practical pressure on the Chinese government vis-a-vis privacy of search data.

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  3. That's certainly possible. But since so much of the internet functions via google, it will surely be a shock when the engine pulls out. What will happen then, is anyone's guess. It should at the very least create a certain amount of social turmoil I would think.

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  4. Turns out Baidu, the Chinese seach engine, stock just shot up 5.67% on this announcement: http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BIDU&selected=BIDU

    Turns out it evidently controls already 63& of the Chinese market, so perhaps little will change...

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