James Osborn

On January 12, 2010, Google announced that a major attack launched against its network from hackers inside China (aimed at exposing the Gmail accounts of Chinese human rights activists) had prompted it to consider abandoning its Chinese operations and reconsider its 2006 agreement with the Chinese government to censor search results in the country.

“Google is failing in its mission to make the world’s information accessible and useful to Chinese Internet users”₁ was a line used by the Vice President for Global Communications and Public Affairs in 2006. Less than four years later in January of 2010 Google announced that due to “a highly sophisticated and targeted attack on [their] corporate infrastructure originating from China… [Google is] no longer willing to continue censoring [their] results on Google.cn”₂ . Since then things have progressed. China has completely denied any involvement in the so-called cyber crimes ₃ and Google CEO Eric Schmidt, speaking at the World Economic Forum in Davos, Switzerland has said that he hopes “to apply some negotiation or pressure to make things better for the Chinese people.” ₄

So is this Google finally living up to its corporate mantra “Don’t Be Evil” or is it simply corporate positioning of a multinational corporation? The fact that Google entered the Chinese market in 2006 and agreed to censor their results demonstrates the willingness of the company to comply with the law in the countries in which it operates and simultaneously demonstrates its lack of concern for local politics, no matter how controversial. Could the so-called cyber attacks which Google claim were the final straw merely be an ideal opportunity to exit a poorly performing market?

“This wasn’t in my opinion ground-breaking as an attack. We see this fairly regularly,”₅ was a statement by Mikko Hypponen, of security firm F-Secure.  ”This goes on all the time. Of the Fortune 100 companies, all 100 are under some sort of attack all the time”. In fact evidence has recently surfaced that Google actively assists governments in democratic societies with access to its properties including Gmail (it’s online email client). Bruce Schneier, a security technologist and renowned technology author recently announced that “In order to comply with government search warrants on user data, Google created a backdoor access system into Gmail accounts. This feature is what the Chinese hackers exploited to gain access.”₆ “Democratic governments around the world — in Sweden, Canada and the UK, for example — are rushing to pass laws giving their police new powers of Internet surveillance, in many cases requiring communications system providers to redesign products and services they sell.” So we must now question why did Google decide this particular attack was newsworthy and why take such a monumental step of pulling out of one of the largest potential markets in the world?

In 2005 Google’s market share was 33.3%1 The announcement to censor results in China published in February of 2006 was intended to slow the nose diving market share if not aimed to increase it. However according to Jennifer Li, Baidu‘s chief financial officer, “Baidu’s market share for search in China was about 77% in the third quarter [of 2009], up from 75.6% in the second quarter [of the same year]. Google [she says], lost share in China, dropping to 17% in the third quarter, from about 19% in the second quarter.”₇

In summary I believe that Google’s response to China had little to do with their moral stance which has apparently changed significantly since 2006 when they entered the market and which the company seem to forgo in order to continue to operate in democratic countries and more to do with an excellent public relations strategy which took the focus from the company and raised a contentious issue before a public with growing anti-Chinese sentiment.

Related articles

• Schmidt Hopes ‘Some Pressure’ Will Make China See Things Google’s Way (wired.com)
• Google Vs. China: A Bluffing War Begins (slog.thestranger.com)

References

[1] Schrage, E. (2006, 2 15). Testimony: The Internet in China. Retrieved 2 2, 2009, from The Official Google Blog: googleblog.blogspot.com

[2] Drummond, D. (2010, 1 12). A new approach to China. Retrieved 2 2, 2010, from Official Google Blog: http://googleblog.blogspot.com/2010/01/new-approach-to-china.html

[3] Hornby, C. B. (2010, 1 14). China defends censorship after Google threat. Retrieved 2 2, 2010, from Reuters.com: http://www.reuters.com/article/idUSTRE60C1TR20100114

[4] Fraher, J. (2010, 1 29). Google’s Schmidt Hopes ‘Pressure’ Will Help Chinese People. Retrieved 2 2, 2010, from Bloomberg.com: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a6.eNsTFNWSc

[5] Shiels, M. (2010, 1 14). Security experts say Google cyber-attack was routine. Retrieved 2 2, 2010, from BBC News: http://news.bbc.co.uk/2/hi/8458150.stm

[6] Schneier, B. (2010, 1 23). U.S. enables Chinese hacking of Google. Retrieved 2 2, 2010, from CNN.com: http://edition.cnn.com/2010/OPINION/01/23/schneier.google.hacking/

[7] Mehta, S. N. (2009, 12 28). Google v. Baidu: Which company will win China? Retrieved 2 2, 2010, from CNNMoney.com: http://brainstormtech.blogs.fortune.cnn.com/2009/12/28/google-v-baidu-which-company-will-win-china/

Tagged as Baidu, Business, China, Eric Schmidt, Google, Google search, Human rights, Web search engine, World Economic Forum + Categorized as Business, Commentary, Rants