Essential Lessons From The Google / China Face-off

According to this morning "Google Inc. defied the Chinese government by saying it will end self-censorship of its search engine and may quit the world's largest Internet market ... [and] A series of 'highly sophisticated' attacks on Google and at least 20 other companies last month, as well as limits on free speech, led to the decision ...” The column further reports "Companies in industries ranging from finance to technology, media and chemicals had been targeted by hackers, Google said. The attacks targeted 34 companies, most of them from Silicon Valley, California, the New York Times reported, citing unidentified people familiar with Google's investigation [and that] Google's decision to stop self-censorship 'lays down the gauntlet to other Internet companies operating in China: to be transparent about what filtering and censorship the government requires them to do,' Kate Allen, Amnesty International U.K. director, said in an e-mailed statement."

Making very large gambles like this will hopefully pay off big for Google in either good PR (i.e., do no evil) or even in getting China to capitulate on some level. Even though Bloomberg quotes Analysys International's claim that “Baidu accounted for 58.4 percent of China's Internet search market in the fourth quarter, compared with 35.6 percent for Google" and goes on to quote "Heath Terry, an analyst at FBR Capital Markets in New York [who said] Google is still a 'long way away from getting out of China' ...[and] The company can threaten to leave the country because China accounts for such a small piece of Google's sales", this does not diminish the importance of Google's refusal to continue enduring China's hack attacks on its customers and remaining complicit in their national censorship.

Google's stand is a further reminder to never neglect putting ethics first. When all of the factors of a deal -- no matter how large -- cloud the waters of knowing who your customers are, the confusion and compromises are likely to worsen down the road. It's easy to say that Google should not have traversed China's internet market from the git go, but it's also never too late to write-off past errors and not chase good after bad when it comes to both investment and spend.

William Busch

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