Google’s Plan to Turn Its Back on China Has Risks

Google’s Plan to Turn Its Back on China Has Risks

SAN FRANCISCO — Google’s move to close its Internet search service in mainland China is a powerful rejection of Beijing’s censorship but also a risky ploy in which Google, a global technology powerhouse, will essentially turn its back on the world’s largest Internet market, with nearly 400 million users.

Little more than two months after threatening to leave the mainland because of censorship and intrusions from hackers, Google closed its Internet search service there Monday. As Google began redirecting tens of millions of mainland Chinese users early Tuesday to its Hong Kong Web site, google.com.hk, parts of the company’s remaining mainland operations quickly came under pressure from Google’s Chinese partners and from the government itself.

Xinhua, the state-controlled news agency quoted an unidentified official with the State Council Information Office on Tuesday who described the move by Google as “totally wrong.”

“Google has violated its written promise it made when entering the Chinese market by stopping filtering its searching service and blaming China in insinuation for alleged hacker attacks,” the official said.

Google’s move to redirect users to Hong Kong, where its operations are uncensored, allowed it to keep its pledge to end censorship while still having a chance to hold on to a share of China’s fast-growing internet search market. […More…]


Mainland Chinese users could not see the uncensored Hong Kong content, however, because government computers either blocked the content or filtered links to searches for objectionable content before it reached them.

Yet Google’s move appeared to have angered mainland officials, and there were signs Tuesday of possible escalation.

China’s biggest cellular communications company, China Mobile, was expected to cancel a deal that had placed Google’s search engine on its mobile Internet home page, used by millions of people daily. In interviews, businessmen close to industry officials said the company was planning to scrap the deal under government pressure despite the fact that it has yet to find are placement.

Similarly, China’s second-largest mobile company, China Unicom, was said by analysts and others to have delayed or killed the imminent start of a cellphone based on Google’s Android platform.

Both technology analysts and the businessmen, who demanded anonymity for fear of retaliation, said that Google may also face problems in keeping its advertising-sales force, which is crucial to the success of its Chinese-language service.

Several held out the prospect that the government could shut down the company’s Chinese search service entirely by blocking access to Google’s mainland address, google.cn, or to its Hong Kong Web site. As of Tuesday, users who go to google.cn are automatically being sent to the Hong Kong address.

“It’s going to boil down to whether authorities feel it is acceptable for users to be redirected to that site without having to figure it out themselves,” said Mark Natkin, managing director of Marbridge Consulting, a Beijing-based technology research firm.

The Associated Press reported that a few Chinese passers-by laid flowers or chocolates on the large metal “Google” sign outside the company’s office building in northern Beijing. Many Chinese felt caught in the middle, admiring Google for taking a stand against censorship but wondering whether the government might further punish the company.

“I don’t know what the Chinese government will do to Google next,” Zhou Shuguang, a blogger who uses the online name “Zuolam” said, according to The Associated Press. “But I welcome the move and support Google because an uncensored search engine is something that I need.”

The Chinese Foreign Ministry said Tuesday that the government would handle the Google case “according to the law,” Reuters reported. The ministry spokesman, Qin Gang, said at a briefing in Beijing that the move by Google was an isolated act by a commercial company and that it should not affect ties between Beijing and the United States “unless politicized” by others.

Google declined to comment on its talks with the Chinese authorities but said that it was under the impression that the move would be seen as a viable compromise.

“We got reasonable indications that this was O.K.,” Sergey Brin, a Google founder and its president of technology, said. “We can’t be completely confident.”

For now, Google’s retreat from mainland China is only partial. In a blog post, Google said it would retain much of its existing operations on the mainland, including its research and development team and its local sales force. While the Chinese search engine, google.cn, has stopped working, Google will continue to operate online maps and music services on the mainland.

“Figuring out how to make good on our promise to stop censoring search on google.cn has been hard,” David Drummond, chief legal officer at Google, wrote in the blog post. “The Chinese government has been crystal clear throughout our discussions that self- censorship is a nonnegotiable legal requirement.”

Mr. Drummond said that Google’s search engine in Hong Kong would provide mainland users with results in the simplified Chinese characters that are used on the mainland and that he believed it was “entirely legal.”

“We very much hope that the Chinese government respects our decision,” Mr. Drummond said, “though we are well aware that it could at any time block access to our services.” Some Western analysts say Chinese regulators could retaliate against Google by blocking its Hong Kong or U.S. search engines entirely, just as it blocks YouTube, Facebook and Twitter.

Google’s decision to scale back operations on the mainland ends a nearly four-year bet that its search engine, even if censored, would help bring more information to Chinese citizens and loosen government controls on the Web.

Instead, specialists say, the Beijing authorities have tightened their grip on the Internet. In January, Google said it would no longer cooperate with government censors after hackers based on the mainland stole some of the company’s source code and broke into the Gmail accounts of Chinese human rights advocates.

“It is certainly a historic moment,” said Xiao Qiang of the China Internet project at the University of California, Berkeley. “The Internet was seen as a catalyst for China being more integrated into the world. The fact that Google cannot exist in China clearly indicates that China’s path as a rising power is going in a direction different from what the world expected and what many Chinese were hoping for.”

While other multinational companies are not expected to follow suit, some Western executives say Google’s decision is a symbol of a worsening business climate on the mainland for foreign corporations and perhaps an indication that the Chinese government is favoring home-grown companies. Despite its size and reputation for innovation, Google trails its main Chinese rival, Baidu.com, which was modeled on Google, with 33 percent market share to Baidu’s 63 percent.

The decision to shut down google.cn will have a limited financial impact on Google, which is based in Mountain View, Calif. Mainland China accounted for a small fraction of Google’s $23.6 billion in global revenue last year. Ads that once appeared on google.cn will now appear on Google’s Hong Kong site. Still, abandoning a direct presence in the largest Internet search market in the world could have long-term repercussions and thwart Google’s global ambitions, analysts say.

The recent hacker attacks were aimed at Google and more than 30 other U.S. companies. While Google did not say the attacks had been sponsored by the government, the company said it had enough information about the attacks to justify its threat to leave the mainland.

People both inside and outside of Google who investigated the attacks have since traced them to two universities on the mainland: Shanghai Jiao Tong University and Lanxiang Vocational School. The schools and the government have denied any involvement.

After serving Chinese users through its search engine based in the United States, Google decided to enter the mainland market in 2006 with a local search engine under an arrangement with the government that required it to purge search results on banned topics. But since then, Google has struggled to comply with Chinese censorship rules and failed to gain significant market share from Baidu.com.

Google is not the first American Internet company to stumble on the mainland. Nearly every major American brand has arrived with high hopes, only to be stymied by government rules or fierce competition from Chinese rivals.

After struggling to compete, Yahoo sold its Chinese operations to Alibaba, a local company; eBay and Amazon never gained traction on the mainland; and Microsoft’s MSN instant messaging service badly trails that of Tencent.

Google’s departure could present an opportunity for Baidu, whose stock has soared since the confrontation between Google and Beijing began. It could also give a chance to Microsoft, a perennial underdog in Internet search, to make inroads in the Chinese market. Microsoft’s search engine, Bing, has a very small share of the market.

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Sobre CarlAn
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