Google and China (3): Some updates
Written by Julen Madariaga on January 14th, 2010
There has been very little new information today and most of the media and the blogosphere is turning around the same ideas, many of them mentioned already in the previous 2 posts of the series.
Here are a few interesting new points I have gathered that I think are worth commenting:
- There has been a call by H. Clinton to China to explain the hacking claims of Google. And in the same interesting article we read that Eric Schmidt participated last week in a dinner with her to discuss how technology can be used to promote democracy.
- Google has now started taking measures, and already all the Gmail accounts are encrypted, as far as I know in the whole world, you can check your account and see the address bar now starts with https.
- However, as of my own tests 5 minutes ago, there is no evidence that the search service in Google.cn has changed. I have a good point of comparison because I did similar searches in an experiment last year. You can look up things like 08宪章 (political document charter 08) and you will see the Manipulated Results, exactly like last year, with the FM message and all.
- In the only article that Xinhua has published about this, there is one quotation by a professor Guo of a Shanghai university: “the Google case was a reminder to the government that Internet supervision could be more moderate and smarter”. Never thought I would read that in Xinhua. (thanks to kaplanpop for the tip)
- The actions of Google have gathered a lot of support from Chinese netizens. However, this must not be taken at face value for a survey of Chinese opinion. The large majority of Chinese of course have not even heard about this, and if they have, they have no idea why it is a big deal that foreign company Google may leave China.
- The stock market still has not decided if the PR points gained in the West are worth the business lost in China. The G shares are down just 1.4% right now. On the other hand, investors have little doubts about Baidu who is up 13,5%. I bet some copycat in the B offices is already starting to plot how to offer an online BDocs, BMaps, BCalendar, Bmail, Bwave and even Bphone to the Chinese…
Kum Morre said:
julia said:
Wahaha said:
marlene maxwell said:
FOARP said:
Julen Madariaga said:
14
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Hello mate, you were quoted by “shanghaiist”!
This is not a question about whether google will leave or not. Since google posted the announcement, they are doomed to leave China.
What will Chinese user to do without google? Will government block google.com altogether. Any idea?
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Hi Cyn
Google.cn is doomed here, I agree with that.
And if you ask me, the way G is managing this it can very well happen that China GFWs the whole of the G services, including G.com. In fact they already do it for Gdocs and Gblogspot, it would be extremely easy to extend the block.
So this move risks to erase Google altogether from the face of China. I don’t get it. G can stop censoring results in Google.cn, sure, no problem with that. But to come up with a direct public accusation against the government is completely and deliberately burning the ships.
And it is not good for China.
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“deliberately burning the ships.”
I like that. In real Cortez style, Google indeed burned the ships, and I am pretty sure, against all odds it will end up kidnapping “Montezuma”. Here’s why:
1-Google automatically earns the high road by reinforcing the stereotype that the CCP is “bad”, meaning, any competitor that does not do the same as Google is automatically “more concerned with money than with values”. Massive PR points right there that would justify any loss of revenue.
2-Imho given Google’s size and scope (and their ability to put one little logo on their front page to remind certain people of certain incidents, for free), Google has the potential to catalyze companies that feel to have been equally bullied by the CCP “business” antics. The potential message is: “Hey CCP, I don’t like the terms you impose on me doing business in your country, we enjoy no fair play, so either you change or me and the boys won’t do business with you anymore, 10% yearly growth or not.” Considering the need for FDI, jobs and appearing to its own people as very successful reformists, having Johnny Foreigner leaving Mother China because it isn’t being far doesn’t sound good at all, internally or externally.
3-Economically China is not important to Google AT ALL, and the reason most people fail to understand how little China matters to Google’s business model is because they don’t use Google’s main revenue generator: AdWords. I don’t have data, but can virtually guarantee that the revenue per impression Google gets in China is a small fraction of the same number elsewhere. There are advertisers here paying 30 bucks a click for legal advice, and Wang Shifu in Gansu won’t be clicking on any ads to buy anti-snoring medicine because he has very little disposable income anyway.
So, Google has one of the most powerful media outlets in the world as leverage, and can use it as much as they want. What do they have to lose? Business? Which business? There is VERY LITTLE business in China for them, and anyone using Google’s advertising tools knows that.
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- China will be in 5 years HALF of the total internet (see my post World Map of the Internet).
- China’s GDP will probably be in 10-20 years biggest in the World.
- China is a fast changing society + Internet is a fast changing medium = Chinese internet is the fastest and most unpredictable marketplace.
There is no way for G (or for us) to predict how it will be in 5 years. What is SURE is that if G pisses China off G will be out of the picture. G is not losing money now in China and it has earned a good position in the rat race of Western companies that is China today. Give that away after 4 years of efforts is not only bad business, it is plain DUMB.
PS. Not to be pedantic, but the first classical reference for the burnt ships is Homer’s Illiad, that’s the one I was thinking. I like Hernan Cortes as well though:)
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