Thursday, January 14, 2010

Why is Google leaving China (part 2)

Sergey Brin at Web 2.0Sergey Brin by ptufts via Flickr
We are in the second day after Google announced it might withdraw from China after massive attacks on email account of human rights activists. While not much more information has come to the surface, the main question that was posed yesterday did not get an answer: Is Google packing its bags for commercial reasons and only uses moral indignation to hide its failure in China?
A rather murky - and I believe partly incorrect - piece in The Guardian suggests even that Google founder Sergey Brin fed that moral indignation and points at his background as a Russian refugee.
The counter argument, defending the moral indignation, was that Google's market share was climbing to the 30-35 percent, compared to its major domestic competitor Baidu. Nevertheless, as noted in the Guangzhou’sSouthern Metropolis Daily, translated by the China Media Project, China counted only for one percent of Google's results. Getting internet traffic, or turnover as other industries have noted, is simply not the same as making a living.
Unfortunately, even when it comes to the market share, the results of Google censored .cn search engine and its uncensored .com search engine are consolidated. Only a few years ago, given the choice between a censored and an uncensored Google search engine, most Chinese users preferred the uncensored one. Traffic to its censored search engine was not even symbolic. The main servers for the .com, as the servers of the attacked Gmail servers are not based in China, so Google's departure would nothing be than a rather symbolic gesture. Indeed, there seem very little commercial reasons for Google to say and now it would at least temporary enjoy to be on the right side of a flare of moral indignation.
Some people have asked, why these entries are called "Why is Google leaving", while that decision has not yet been made. As I point out in the comments at part 1, this is an assumption, an educated guess. I will add the word "not" if I'm wrong.
Sorry about the rant, let's turn to the other commentators and see what they added in the part 24 hours.

Let's first point at a much better contribution, with many contradicting statements, by The Guardian, a cool overview of video comments, including Michael Anti, Isaac Mao, Kaiser Kuo, Jeremy Goldkorn and Jeff Jarvis.
In USA Today Shaun Rein argues that even if Google would have had a future in China, the company has now blown away those chances by its recent action:
"Google's dead in China," predicts Shaun Rein, managing director of China Market Research Group, a research and consulting firm in Shanghai. Even if the company were to stay on, no one in China "would have the confidence to do marketing campaigns" with them.
In Computerworld, Shaun Rein speculates about the, indeed rather unlikely, chance all Google services in China might be blocked:
There is also a concern that all Google services could be blocked in China if the company violates Chinese regulations by stopping its censorship of search results, said Shaun Rein, managing director of China Market Research Group in Shanghai. Offerings like Gmail, Google Docs and Google hosting for businesses all have users in China and could be affected by a move to block the search giant's services.
In CNN, Jeremy Goldkorn defends Google's move, giving the hassle the company got in the recent past:
"Google has been subject to an inordinate amount of harassment in China over the past year, ranging from blocking and interruption of services like Google Documents and G-mail that are not hosted in China, to state-owned broadcaster CCTV accusing [Google] of being propagators of pornography."
He adds: "The last six months have seen a huge increase of censorship on domestic sites and a noticeable attitude by the Chinese government saying they don't really care what foreigners think.
"I imagine the Chinese government's reaction is going to be 'Well, if you don't like our laws, get lost.'"
In The Washington Post, Jeremy Goldkorn sees a positive twist for the future:
"This will make the extent of Chinese censorship a lot clearer even to ordinary Chinese people who are not aware of it," said Jeremy Goldkorn, who does the blog and runs an Internet research firm. He also runs a Web site called danwei.org, which has been blocked since July.
Tom Doctoroff, in the Wall Street Journal, has a look at the figures for Google in China.
Google enjoys a 35% market share in China, a figure that is growing, but its profitability is open to question, says Tom Doctoroff, managing director of J. Walter Thompson. Chinese Internet users engage in relatively little e-commerce, which stymies the ability of companies like Google to make money. "We should not ignore the operational difficulties that Google has had in penetrating this market," Mr. Doctoroff said.
In Marketplace, Kaiser Kuo goes for the final knockout:
We're talking about a company where their main domain name, Google.com, was something that most Chinese Internet users just simply couldn't spell.
Commercial
Jeremy Goldkorn, Tom Doctoroff, Kaiser Kuo and Shaun Rein participate in the China Speakers Bureau. When you need them at your conference, do get in touch.

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