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Can Google Live Without China?

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By Marquis Codjia

Op-eds in prominent newspapers around the world are discussing profusely the latest decision by Google to disengage from China in a move that epitomizes the search engine’s level of camaraderie with communist censors.

While few viewpoints offer a holistic examination of a complex issue that goes beyond the business sphere, the majority applaud Google’s shift as salutary to enhancing democracy in the Asian country.

The query nowadays in the western hemisphere is whether China can live without Google.

Many respond by the negative, citing, among others, the infancy of the country’s technology infrastructure and its limited number of qualified engineers; some even posit metaphorically that Beijing will be “in the darkness” after such exit.

Truth be told, China needs Google far less than the opposite. Hence, to the inverse question – can Google live without China? – the reasonable answer becomes yes.

Strategically, there is a superfluity of arguments attesting that the Mountain View, California-based technology mammoth is following the wrong path in handling its Chinese conundrum. Some of these arguments are specifically endogenous to the firm, whereas others are more varied in nature and closely inherent to the macro-environment in which the firm evolves.

Google does not divulge the size nor the profitability of its China business but it can be inferred, from the country ca. 400 million internet users, that Google.cn – its local portal – contributes a hefty part of the overall bottom line.

Gauging the firm’s scope of business in Mao’s republic implies factoring not only core search revenues but also the ancillary business derived from joint-ventures in Asia and Google’s own commercial undertakings.

The firm cannot ignore the potential cash-cow that Chinese internet users represent and the competitive pre-eminence that a local presence can proffer. The recent announcement from Google to move its local servers from the mainland to Hong Kong and end its censorship of searches does a disservice to the firm’s core business strategy because Google needs to be in China to win in the Chinese market, irrespective of the notorious practices of the nation’s economic climate.

Therefore, Ed Burnette is accurate in reiterating this viewpoint.

It is very momentous to acknowledge that China’s economic practices are far from fair and its socio-political system may at times be antithetical to paradigms experienced in other parts of the world. That China is not a democracy is commonplace rhetoric, yet many, if not all, Fortune 100 companies are keen to put basic tenets about free speech into oblivion and open a Chinese subsidiary.

Geostrategic factors at the macro-economic level are those that Google should pay thorough attention to. The firm is a leader in its industry and possesses reliable friends within the Obama administration – Andrew McLaughlin, its former head of global public policy, is currently the Deputy U.S. Chief Technology Officer in the Executive Office of the President. Yet, a company by itself cannot represent a major strategic player in the much larger and complex continuum of US – China relations.

Politicians are very economical with the truth when it comes to China. While they occasionally resort to rhetorical dissent vis-à-vis Beijing’s transgressions on democracy and issues relating to free speech, they all keep legendarily mum when it comes to coupling business with ethics.

They shouldn’t be necessarily blamed because there’s a variety of sibylline elements that make up transnational relations, and bi- or multi-lateral issues are not always simplistic with crystal clear solutions.

If Google pulls out of the mainland, it stands to lose billions of dollars in core revenues and collateral business. It will lose its dominance in the regional search business and such economic void will attract other rivals, which in the end will cripple the firm’s global market share.

This doom scenario is far from a Hollywood sci-fi episode. If Google exits, locals (such as Baidu) and major rivals like Microsoft’s Bing and Yahoo will doubtless grab the manna. Alternatively, new entrants may easily imitate the firm’s search model and take advantage of local authorities’ reprimand and develop their business.

There is a long list of Western multinationals operating in the mainland despite repeated protests from human rights activists. Think McDonald’s, Wal-Mart, Carrefour, Citibank, etc.

Collateral losses for Google are already reflecting China’s angry reaction after the search engine made its announcement; news media reported so far that Chinese mobile phone companies will drop Google or Android, its new mobile operating system.

  1. Robert
    March 26, 2010 at 11:57 am

    Google can definitely live without them; the country is not allowing free speech and sooner or later folks will revolt.

  2. Janice P;
    March 26, 2010 at 11:57 am

    Excellent article!

  3. CrazPaul
    March 26, 2010 at 11:58 am

    Google can’t afford to toss China, they’re the future whether we like it or not.

  4. Cuan1789
    March 26, 2010 at 12:01 pm

    just came across ur site in looking for someth’n else and love the content so far; great article. just signed up!🙂

  5. Apero
    March 26, 2010 at 12:02 pm

    Great article🙂🙂

  6. JohnG
    March 26, 2010 at 12:22 pm

    Chinese are unfair in the way they treat us while we give them anything they want.

  7. Verre
    March 26, 2010 at 12:23 pm

    Sooner or later China will need to let democracy reign…

  8. IT GURU
    March 26, 2010 at 12:26 pm

    Excellent post; luv’it

  9. GooglingGoogle
    March 26, 2010 at 12:27 pm

    The company needs to adapt to CHinese rules, that’s the way of business.

  10. ProudP
    March 26, 2010 at 12:29 pm

    Great; thx

  11. Hung Yi
    March 26, 2010 at 12:35 pm

    China can definitely without Google while Google needs China. If the company doesn’t want to do business in China, they can certainly leave. We don’t need them, we can build our own search engine and be good at it. We’re moving fast and even though our political system is still in progress, we’ll get there. For now, we have enough engineers to get the job done and have another baidu and so on.
    by the way, the article is brilliant especially coming from a westerner.

  12. Patel Shiva
    March 26, 2010 at 12:36 pm

    Great🙂

  13. Kong Tsi
    March 26, 2010 at 12:38 pm

    Great article, and by far the most unbiased I’ve read in American media.

  14. Mohammed Khan
    March 26, 2010 at 12:40 pm

    China is going thru internal shifts socially and politically, economically their system is far from perfect either. That said, Google is better off in China than outside; the US is no different in how they manage business and politics.

  15. Joey
    March 26, 2010 at 12:40 pm

    awesome

  16. ChinaGeek
    March 26, 2010 at 12:43 pm

    Great post here mate, r u in the search business? If not, u shd. I’ve sent u an email😉

    • March 26, 2010 at 1:06 pm

      I’m not in the search business; please read my bio at your convenience on this site. cheers

  17. Dr. Port Mestler
    March 26, 2010 at 12:50 pm

    Marquis,

    Thank you for enlightening us on this important subject. I’ve been living in various countries in Asia for more than 30 years, half of which was in China. You depict a very good situation in China. This is a beautiful country with its problems as any country; their leaders are not perfect as any other leader. I think they are not anti West per se but rather are trying to protect their economies. I sent you my personal contacts; we can stay in contact.

    Regards,
    Dr. Port Mestler

    • March 26, 2010 at 1:03 pm

      Thank you Dr. for your kind words; we certainly share the same balanced views on China. I replied to your mail.
      Best,
      Marquis

  18. Dreamday
    March 26, 2010 at 12:50 pm

    Thanks for the post

  19. Digit MAN
    March 26, 2010 at 12:52 pm

    http://news.cnet.com/8301-1023_3-20000757-93.html
    Google is expected to announce on Monday that it will withdraw from China on April 10, according to a report in a Beijing-based newspaper that cited an unidentified sales associate who works with the company.

    “I have received information saying that Google will leave China on April 10, but this information has not at present been confirmed by Google,” the China Business News quoted the agent as saying. The report also said Google would reveal its plans for its China-based staff that day.

    A Google representative declined to comment on the report.

    Google, which has a significant share of the search market in China, announced in January that it no longer intended to censor search results in that country and would consider leaving entirely. Google has identified China as the source of attacks on prominent U.S. Web properties and e-mail accounts belonging to human rights activists, though it has not revealed the specific people behind them. For its part, the Chinese government has denied any involvement.

    After months of negotiations over whether it can run Google.cn with or without restrictions, it seemed that Google was getting ready to make a decision in the near-term future. However, according to a Financial Times report last week, Google is now “99.9 percent” certain that it will shut down Google.cn.

    The Chinese government has reportedly warned Google business partners to prepare for the day when they can’t use Google services such as a search bar on their Web sites. Earlier this week, Google confirmed that it had received a letter purportedly signed by 27 advertising partners in China that complained of a lack of communication on the part of Google and demanded to know how they would be compensated if the company withdrew from China.

  20. D68
    March 26, 2010 at 12:56 pm

    Great article

  21. TartP
    March 26, 2010 at 12:57 pm

    I think China is on its way to becoming number one pretty soon

  22. Au San Yi
    March 26, 2010 at 12:58 pm

    Thank u for sharing this

  23. Portland
    March 26, 2010 at 12:59 pm

    wldnt it be nice if everyone will just get along?

    • Allen
      March 26, 2010 at 12:59 pm

      u rite peace and love😉😉

      • P
        March 26, 2010 at 1:00 pm

        WAY TO GO

    • March 26, 2010 at 1:05 pm

      Certainly would! Thanks for putting a bit of spiritedness here🙂

  24. Coupe
    March 27, 2010 at 3:42 pm

    Google can sure live without China, this firm is making millions of dollars in profit irrespective of china or not.

  25. Ahmad Hamid
    March 27, 2010 at 3:44 pm

    Great article!!!

  26. Luca Pol
    March 27, 2010 at 3:46 pm

    I disagree with the author and those who think Google cannot live without CHINA. The country is big and the profit potential is huge but we can’t let dictators act as if anything was ok. We can’t continue to condone those anti democracy behaviors by other nations because of business imperatives.

  27. BO1959
    March 27, 2010 at 3:47 pm

    Great article here, especially on the geopolitical level😉

  28. Girarp
    March 27, 2010 at 3:49 pm

    Google shouldn’t leave China ‘coz it will lose business that will go to MSFT, Apple and the others.

  29. Johnnie P
    March 27, 2010 at 3:51 pm

    😉🙂 cool

  30. Pries
    March 27, 2010 at 3:52 pm

    I think Google should pull out of china, period.

  31. Maria Gonzalez
    March 27, 2010 at 3:54 pm

    Great, simply great.

  32. Rupert Q
    March 27, 2010 at 3:55 pm

    Google shouldnt leave china

  33. Diakite Alliou
    March 27, 2010 at 3:56 pm

    Great article my friend

  34. Najar
    March 28, 2010 at 10:21 pm

    Google is the best firm in the world.

  35. PierceB
    March 28, 2010 at 10:23 pm

    GREAT ARTICLE….

    • Year One
      March 30, 2010 at 7:14 pm

      Great going and good article!

  36. Operra
    March 28, 2010 at 10:24 pm

    China and Google share the same destiny because, in my opinion, they need each other so neither is successful without the other.

  37. EuroGeek
    March 28, 2010 at 10:25 pm

    Thanks for posting this.

  38. Patel
    March 28, 2010 at 10:27 pm

    😉 thx

  39. Ken Tse
    March 28, 2010 at 10:29 pm

    Thanx for keeping tabs on this

  40. Dolce Vita
    March 28, 2010 at 10:30 pm

    China is just kidding, they can’t live without Google and so does Google as well. Its jsut a game

  41. Dreyfus23
    March 28, 2010 at 10:32 pm

    Great analysis on this one mate

  42. MACHCASH
    March 28, 2010 at 10:34 pm

    THx my friend, sign me up here!

  43. Alpine V
    March 28, 2010 at 10:35 pm

    awesome analysis

  44. Clean
    March 30, 2010 at 7:17 pm

    thx🙂

  45. Powlaski
    March 30, 2010 at 7:20 pm

    Well, google can’t live without china ‘coz the author is right, they’ll lose billions of dollars if they do that.

  46. FORM26
    March 30, 2010 at 7:22 pm

    Something needs to be a catalyst here, china can’t sustain its current economic model so Google just needs to let it die out and stick around.

  47. Ula Thur
    March 30, 2010 at 7:40 pm

    i disagree with u because i think google doesnt need china, they need to let that country know that human rights are more important than money money money………

  48. Das Berliner
    March 30, 2010 at 7:43 pm

    Awesome content here, sign me up.

  49. EIC Heart
    March 30, 2010 at 7:47 pm

    Google must stay in china and help change the country from within.

  50. Juan Goméz
    March 30, 2010 at 7:49 pm

    Thanks for the psot.

  51. Diagne Koleur
    March 30, 2010 at 7:52 pm

    Google needs china as much as china needs google.

  52. Fabrice567
    March 30, 2010 at 7:54 pm

    good post🙂🙂

  53. ChapMan
    March 30, 2010 at 7:56 pm

    thx for this post, i read it elsewhere before bumpin on the website

  54. Rorb
    March 30, 2010 at 7:58 pm

    Somthin else we should think abt is what chinese engineers are locally developping as far as search engine, they’re so good at copyright infringement that i’m wondering what they’re doing now.

  55. 37TH MAN
    March 30, 2010 at 8:06 pm

    Great analysis my friend!

  56. Gest
    March 30, 2010 at 8:11 pm

    profits, dollar sign, that’s why google shd stay in china

  57. Jason
    March 31, 2010 at 8:55 pm

    While Google is taking a principled stance in its exit from China, the problem is that its competitors do not have the same moral compass and will take advantage of the situation. Were Google more sneaky, they could have allowed tidbits of information to flow on occasion and played it up to technical problems.

  58. William
    March 31, 2010 at 8:56 pm

    Hi everybody!

    I’ve recently being blocked by Google during 1.hrs because of having searching a web site that I do like to book my flight whence traveling, hence as I’e forgoten the Url of this site I’ve did then obliged to search page by page…but after a while Google announced that I’ve been spoted to be a robot formulating false queries providing to mislead Google search engines to these & that etc…, I do find this scheme recent scheme of Google greediness in trying to obtaines actual & future market monopoles on its search engine is really unfair & that in all terms!!!
    Hence as everybody who knows well the web strategy & of the Google algorithme…any company of country in the world with the least or more of a financial investment anyone can creates another or many other search engines which do have the same or much better capacity of productivities in terms of human and social welfare service that can provide as search engine and earning far better revenue which is at the actual moment are not available hence I do advise government of industrial countries, or private financing institutiions should pays a bit attention to queries of sollicitors who would & can able to creates a search engine just as this greedy Google can & starts earning much more money than they wish thus too that also helps to break the monopole supremacy of a stupid leading search engine that eats more than it can swallow.

  59. x431 Master
    March 31, 2010 at 9:15 pm

    Google’s action is totally wrong, do not give enough respect to chinese users.

  60. Stephan
    March 31, 2010 at 9:17 pm

    Religious persecution is a daily reality in China, “The Chinese people need to be told the truth – and gatekeepers to the Internet Microsoft and Yahoo have a duty to let the truth be told.”
    We call on the international community to continue to bring pressure to bear on China to allow religious freedom and freedom of speech. We hope Microsoft and Yahoo will indeed do the right thing and stand up for freedom.

  61. Dion
    March 31, 2010 at 9:18 pm

    Yahoo! are scum. They helped the Chinese dictatorship persecute journalist Shi Tao. Shi Tao was given a 10 year prison sentence for emailing a brief list of censorship orders to the Asia Democracy Forum. Yahoo! told US Congress that they didn’t realise what the Chinese dictatorship were intending to do. It was later revealed that Yahoo! lied to congress after the details of Shi Tao’s arrest warrant and the requests made to Yahoo! were revealed.

    Yahoo! also helped the Chinese dictatorship persecute dissidents Li Zhi and Wang Xiaoning (who were given eight and 10 year prison sentences respectively). Wang Xiaoning was imprisoned because he posted electronic journals in a Yahoo! group calling for democratic reform and an end to single-party rule.

  62. FitJerk.com
    March 31, 2010 at 9:21 pm

    OFCOURSE China needs Google. This was further proved when the Chinese government scrambled and flexed their communist powers by capping any coverage on the topic by releasing an email to the media outlets that contained the following:

    “… Only use Central Government main media (website) content; do not use content from other sources”

    “… Do not produce relevant topic pages; do not set discussion sessions; do not conduct related investigative reporting”

    “… It is not permitted to hold discussions or investigations on the Google topic”

    “… All websites please clean up text, images and sound and videos which support Google, dedicate flowers to Google, ask Google to stay, cheer for Google and others have a different tune from government policy”

    Pathetic. F*** Communism!

  63. FaTe
    March 31, 2010 at 9:22 pm

    t’s the best move Google could have made in my opinion.

    China has long since tightened the noose around the majority of outside sites either via restricting it’s operations or totally shutting it down.

    Everyone says China will be fine, yes it most likely will be. However will the Chinese people take as kindly too it? Let’s face it, it’s been some years since any of our Governments truly reflected our own personal desires.

  64. Nirav Patel SEO
    March 31, 2010 at 9:23 pm

    Yeh !!!

    Its really strong question is ahead.

    But I don’t thing there is any requirement of each other.

    If Google, dead in china then other search engine (like Yahoo, Bing…) has strong opportunity to grow up in china.

    In the end, this all thinks are going on but the main think is people gets the new chance to use something different.

    So cheers …..

    Thanks,
    NIrav Patel
    DRAFTINGSimplified.com

  65. Fred
    March 31, 2010 at 9:24 pm

    Of course Google can live without China. The entire world can live without China. But China cannot live without “Western” demand. There are other, better “China”: India, Brazil…

  1. March 25, 2010 at 8:30 pm

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