International diplomacy is the fine art of negotiations that Hillary Clinton is learning as she goes. When Google announced last week it was purchasing a power plant to save on its utilities bill, I reported that their Energy Czar should be considered for the US cabinet post of Secretary of Energy. And while the Search Engine giant is ubiquitous and a jack of all trades, I don’t think they have the finesse for resolving international debates.
One of my social media predictions for 2010 was that Southeast Asia would be the next social media geographic focus. Well…we’re only into the new year a couple of weeks and that hotspot has turned into a ‘hotbed’ of controversy. Actually threatening to pull out of China, Google wants to stop censoring its search results in China and could end up closing operations as a result.
Google threatens to pull-out of the country following an attack on Google’s servers in Mid-December that targeted the Gmail accounts of Chinese human rights activists.
"As part of our investigation we have discovered that at least twenty other large companies from a wide range of businesses — including the Internet, finance, technology, media and chemical sectors — have been similarly targeted," wrote David Drummond, chief legal officer for Google.
The Electronic Frontier Foundation and Human Rights Watch both issued statements calling for broader changes in policy from companies that operate in China. “Too many of them have been willing to comply with Chinese demands that they check their values at the border,” wrote EFF International Outreach Coordinator Danny O’Brien.
China’s history of policing the Internet goes back to 2005. While initially appearing unassuming, an Internet security campaign featured animated beat cops that actually popped up on a user’s browser. They then walk, bike or drive across the screen warning Chinese citizens to stay away from illegal Internet content.
But what about the two major social networks? Both Facebook and Twitter have both made overtures in China to capture adoption by the Chinese people. Both will need to take on Xiaonei which translates to "On Campus" in Mandarin as that is the most widely used social network in the country. Since Chinese social networking is less about who you know versus who is nearby, location-based services is where Twitter and Facebook might be able to move the needle in this country.
Smaller LBS firms like GyPSii have already scored major deals in China with companies like China Unicom, based on their geolocation features. Shane Lennon, GyPSii’s senior vice president marketing and product development notes,“With over 687 million mobile subscribers in that country, the future of connectivity in China is mobile NOT traditional computers,” Lennon notes.
So is Google taking on a huge risk by publicly trying to shame a world power the size of China into lightening up on its censorship policies? In essence what the company appears to be doing is acting like a sovereign state itself. Only Google could assume that type of posturing. However, if world powers like the US have been unsuccessful in addressing human rights issues with this country in the past, what makes Google think its clout has any more power?
"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.
Duncan Clark, chairman at BDA China, a Beijing-based consulting firm, says there are few scenarios he could envision "where Google will win and China will back down."China is not going to make concessions in a public fashion like this," Duncan says.
On the other hand, the current financial stakes in this fight for Google are low. Google owns about 31 per cent of the Chinese search engine market (homegrown Baidu owns 64 per cent) but it derives only about 3 per cent of its $22 billion US revenues from China.
Still, Google was starting to reap small dividends in China, after opening a beachhead office in Beijing in 2006. With more than 1.3 billion so-called "netizens," China is the world’s largest Internet market and Google would, if it left China, forgo considerable upside potential for the future.
So as far as a vote for Google as the next secretary of state, I would have to say ‘pass.’ As much as these censorship issues are abhorrent, I believe this issue might have been better resolved behind closed doors than trying to shame a world power on a national stage. Even if you are Google!
Jan 14- UPDATE 1: It is interesting to note, that the sensitivity of this issue is so volatile that not even the three Eric Schmidt, Sergey Brin & Larry Page top executives at Google could agree on what was the best move to resolve this issue. While Larry Page has remained closed-mouthed on the topic, Sergey Brin acting as Google’s unofficial corporate conscience objected to cooperating with a country that allows government censorship. However, according to a Wall Street Journal report, Chief Executive Eric Schmidt has long believed that it was Google’s moral obligation to do business with China in an effort to try to open up the regime.
Jan 14- UPDATE 2: According to the same report, when the Google ‘troika’ did finally reach consensus to pull out of China, they didn’t initially consider the potential retribution against Google employees in China. To resolve any form of retaliation, the founders and their advisors agreed to add a statement to their announcement that indicated the move was "driven by our executives in the United States, without the knowledge or involvement of our employees in China."
Jan 14- UPDATE 3: In a Reuters’ release, Microsoft, the world’s largest software maker is not likely to Steve Ballmer, CEO support its fierce rival Google in its battle with China and rebuffs broad U.S. political backing for Google. "There are attacks every day. I don’t think there was anything unusual, so I don’t understand," Microsoft CEO Steve Ballmer told Reuters after a meeting on modernizing government services at the White House.
"We’re attacked every day from all parts of the world and I think everybody else is too. We didn’t see anything out of the ordinary. I don’t understand how that helps anything. I don’t understand how that helps us and I don’t understand how that helps China," Ballmer said.
Jan 15- UPDATE 1: Secretary of State Hillary Clinton said Google’s allegations "raise
very serious concerns and questions," and that "we look to the Chinese
government for an explanation." But later, a State Department spokesman
said the dispute was within "the range of issues" that normally define
U.S.-China relations, adding that it "is a broad, it is a deep, it is
an expanding and durable relationship." This back-peddling from the state department is indicative of how lightly we need to tread in China. It’s easy to say, we need to stand up to bullies and make bold accusatory statements to curry world favor by denouncing censorship, but it’s another thing entirely to know that at the end of the day we still need to maintain a civil working-relationship, particularly with a country that we owe billions of dollars to in debt.
Jan 15- UPDATE 2: According to Rebecca Fannin at Forbes.com, Google may be leaving China, but this is not due to a censorship issue. Google while appearing altruistic to the world in fighting the good fight (rah,rah) is leaving China first and foremost based on a business decision. The search giant just could not compete with Baidu. While Google’s market share in China moved the needle to 31%, Baidu’s grew from 47% in mid-2006 to 64% today. That’s a big lead. According to industry experts, Baidu’s product and service is far superior to Google’s. So much so, that according to Fannin, Baidu may someday be bigger than Google globally.
So who is trying to save face now? If Google is packing up its marbles
to play in someone else’s sand box, it may not be because it was up
against a bully in the school yard – it may have been because it just
refused to play the game anymore with someone who would continuously
out-beat them while the whole world was watching..
Jan 16- UPDATE 1: According to Martin Jacques, author of "When China Rules the World…" Google will be obliged to either accept Chinese’s censorship policies or exit the world’s largest Internet market, with serious consequences for its long-term global ambitions. This, according to Jacques, "is a metaphor for our times: America’s most dynamic company cannot take on the Chinese government – even on a issue like free and open information – and win." He adds, "Google’s fate is a sign of the world to come, and the sooner we come to appreciate the nature of a world run by China, the better we will be able to deal with it."
While this is a ominous forecast when one considers that China may become the world’s next number one superpower, it does give one pause as to how to deal with the Chinese government going forward. My thesis in this blog hinges on internal talks with the Chinese through negotiations,conciliation, mediation and compromise. In essence, I believe more can be accomplished by keeping one’s enemy close versus putting one’s tail between its collective legs and running.
Jan 17 – UPDATE 1: In a Reuters report, Google enters a second week of high stakes brinkmanship with China’s government, amid speculation the firm has decided to pull out of the world’s biggest Internet market over cyber-spying concerns. Google deniese these rumors saying the company is still in the process of scanning its internal networks since the cyber-attack in mid-December and would continue to hold talks with the Chinese government over the next few weeks.
Sounds like back-peddling to you? Apparently Google’s defiant public display to exit China did not garner their anticipated result.
