Friday, January 15, 2010

Why is Google leaving China (part 3)

Image representing Baidu as depicted in CrunchBaseImage via CrunchBase
Google committed an act of war against China, says Shaun Rein in Forbes in the third day after the US firm announced it would leave China after its Gmail service got attacked by what other says would be Chinese forces. The media upheaval still shows no sign of abating.
Let's listen first to the astute Shaun Rein in Forbes. Google is threatening China with chaos and instability, a severe misjudgment of what is important in China:
China's leaders fear instability more than anything else. Contrary to what most Americans think, most of China's leadership and their parents suffered terribly in the chaotic time of the Cultural Revolution...
In this context, Google's ( GOOG -news - people ) actions are as irresponsible as they are brazen. Does anyone really think the Chinese government is going to bow down to the demands of a foreign media company? Google's move is similar to failed U.S. economic sanctions against Iran, Myanmar, Cuba and North Korea. ...
Has Google really thought through the implications of its actions, beyond just giving up the world's fastest growing digital advertising market and the welfare of its employees and legal representatives in China? Or is this the impulsive move of an arrogant and immature leadership team used to getting its way?
 Bottom line, according to Shaun Rein: Google was unable to beat its major competitor and is making things even worse by backing out in such a clumsy way:
Kai-Fu Lee, Google's hubristic former China president, failed to make Google more competitive. In our interviews with young Chinese graduates, they said they would rather work for Baidu than for Google, as I wrote in "Three Myths About Business in China." They want to be where there is no glass ceiling, and where services are tailored for the Chinese. Baidu and companies such as Sina and Tencent have been taking advantage of Google's slowness to create new China-friendly services...
Google's actions in China not only imperil its own bottom line; they also threaten to start a slowing of Internet and media reform. Much as economic sanctions fail in statecraft, Google's actions will end up doing little good for either its investors, its partners or, perhaps most important, China's citizens.
In the Washington Post, also Kaiser Kuo warns against the possible negative fallout from Google's decision to possibly leave China, a risk that has been severely underestimated by Google:
"This would adversely affect a lot of people, not just the technorati elite that is Western-oriented anyway," said Kaiser Kuo, an independent technology consultant. "The government could face a serious backlash this time."
Although, Jeremy Goldkorn tries to find in the same article also a positive side:
"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, a China Internet specialist who posts on Sina's blog site and runs a Web site called Danwei, which has been blocked since July.
In AdAge Kaiser Kuo explains why the arrogant attitude has brought Google in a no-win situation from the very start:
"Their chief problem was the idea they could come into the market without doing marketing and expect to replicate the miraculous success they had enjoyed in the U.S. They did no marketing," said Kaiser Kuo, a Beijing-based consultant for Youku.com and the former of head of digital strategy at Ogilvy & Mather in China.
"They just had a name that was hard for Chinese to pronounce and harder to spell," Mr. Kuo said.
Sam Flemming of the CIC, a research firm analyzing the buzz on internet joins the argument, also in AdAge, and explains why domestic competitor Baidu was doing so much better:
"With its massively popular Tieba forums, a question-and-answer service and a wiki, Baidu leveraged Chinese netizens' natural propensity to share and create content and seamlessly integrated it in to the overall search experience way before Google's attempts," said Sam Flemming, founder and chairman of CIC, an internet research and consulting firm in Shanghai.
"Even Google's attempts in the West at integrating social media and search fail in comparison to
Shaun2Shaun Rein by Fantake via Flickr
what Baidu is doing in China," Mr. Flemming said.
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Shaun Rein, Kaiser Kuo, Sam Flemming and Jeremy Goldkorn all belong to the China Speakers Bureau. When you are interested in having them as a speaker at your conference, do get in touch.
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