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Sino-Google Conflict (Part V): Who is the looser, anyway?

Posted in Internet and Search by Manas Ganguly on March 24, 2010

The Google-China spat coincides with a particular souring of US-China relations and an increasing belligerence of Chinese leadership to all things western that seem to challenge it’s vice grip on the cultural and political environment of China. Before the censorship issue spiraled out of proportions, Google had collaborated with the Chinese government to censor online info available to the Chinese public. But things went a little too far, with Chinese hackers trying to hack into the Gmail accounts of Human rights activists in China. A lots been spoken about whose loss is it anyway?

Here’s my take on whether the opportunity loss for Google outweighs the Chinese loss of its freedom to information and expression.

The Great wall has been a symbol of China for long and metaphorically it can be regarded as guarding a closed kingdom. The status has not changed over the centuries.

The Google-China spat is probably a good indicator of the parochial thought that pervades the Chinese policy makers and the leadership.
While Multinational and Global organizations are doing big business in and with China, the inner core of Chinese thought is still very non-transparent, conservative and insecure.
By trying to regulate, the power of free expression, the Chinese leadership is also denying its citizens the right to stand together with their global counterparts.

Bottomline, Google’s loss may be transient and transitory. But China seems to be doing a permanent loss to its technology innovation and its human rights to information and expression.

The impact of information censorship on free information and societal development

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Sino-Google Conflict (Part IV): The Impact of Information censorship on free information and societal development

Posted in Internet and Search by Manas Ganguly on January 20, 2010

If Google walks away entirely from its business dealings in China, it’s unlikely that other U.S. companies will follow it out the door. However, they might be emboldened to speak up in the future when they encounter uncomfortable restrictions imposed by the country’s government. A possible Google pullout could also anger China’s public and embolden other companies to vent grievances. China’s Internet-connected public has for long tolerated a gap between rapid economic and technological progress and a closed, secretive political system. The political outcome of this stand-off is that it could stir up a restive group of people, which is the younger people and the Internet users in China who may look at access to information as a civil right. China’s potential Internet lobby is vast. China’s online population soared by nearly 30 percent last year to 384 million people, bigger than the whole U.S. population. It includes the Chinese elite of entrepreneurs and professionals who have benefited most from economic reform and usually support the ruling party. While, other companies that accept pervasive controls in exchange for access to China’s huge and growing market appeared unlikely to follow Google’s lead. Still, there could be less drastic changes in their relations with Beijing. There may not be a lot of foreign companies stand up and walk out of China, but you might see a lot more foreign companies standing up and being much tougher in dealing with what they consider to be an unfairness in market access and trade issues.

A good example of how the Chinese government “censors” page resuts that are considered Offensive to the Chinese Government!

Many in China’s public disagree, to judge by the bundles of flowers left outside Google’s Beijing offices in the period when the issue was on boil and pleas on Internet sites for it to stay.It was a striking show of support and affection for an American company in a society where foreign investors have created millions of jobs but are regarded with distaste by some Chinese officials and a vocally nationalistic segment of the public.

Google also has millions of Chinese admirers. One group created a Web site, hosted on a California blog service, whose plaintive title says it all: — Chinese for “Google, Don’t Go!” Such sentiments might extend to the princelings, children of the communist elite who have played on family ties to make fortunes from partnerships with foreign investors and might be uneasy about alienating them.

Chinese and foreign businesses rely on Google’s email, maps and other services based abroad, which could lead to disruptions if authorities try to retaliate for a Google pullout by blocking access to its U.S. site.

The conflict also could fuel trouble for China’s companies abroad, where its swollen trade surplus and complaints about trade barriers are straining ties. Chinese investments in mining and oil face opposition in Australia and elsewhere.
Already, Chinese companies abroad will start hitting a ceiling caused by this stuff happening at home. Being Chinese might be a liability.

Beijing caused a similar uproar in 2002 when its new filters blocked Google’s main site outright. Scientists pleaded that they needed it to find information online. The government of then-President Jiang Zemin relented and eased access.
That was hailed at the time as a victory of common sense,” Clark said. “Will they be able to do it again?”

Political analysts say the government may be waiting to measure the level of public sentiment before deciding how to proceed

A compromise solution could also expose Google to some criticism after having taken the stand it would not countenance Chinese censorship

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Sino-Google Conflict (Part III): Of and for Free societies

Posted in Internet and Search by Manas Ganguly on January 19, 2010

Google’s threat to quit China over censorship and hacking intensified Sino-U.S. frictions. Washington said Internet control was a serious issue and demanded an explanation from Beijing. In the mean time, China has said it does not sponsor hacking. Its officials have also accused the West of seeking to undermine China’s one-Party rule by backing dissidents and campaigns against censorship. Now Google is at the heart of those tensions.

Pressing China for an explanation, U.S. Secretary of State Clinton said: “The ability to operate with confidence in cyberspace is critical in a modern society and economy.”We have been briefed by Google on these allegations, which raise very serious concerns and questions,” Clinton said in a statement in Honolulu. “We look to the Chinese government for an explanation.”Earlier, U.S. President Barack Obama, during a visit to China in November, told an online town hall that he was “a big supporter of non-censorship”.

With China the largest lender to the United States, holding $800 billion in Treasury bills, these Internet tensions will make steering this vast, fast-evolving relationship all the more tricky, especially with the U.S. Congress in an election year.
The issue was snowballing beyond Google and its problems.

On one end is the ego of the Chinese establishment: If this becomes heavily politicised, and there are signs that it is, and people in the Chinese government say, ‘This is good. It serves you right, and we won’t bow our heads to the United States, then there’ll be no way out,”

On the other, the impact on China’s image will gradually also affect the enthusiasm of investors. It’s not the pure economic losses — a billion or so — it’s the deteriorating environment

There are already pressures such as Climate, Economy, Security and Cyber-Security straining the US-Sino relations. The Google issue may yet be one of the reasons for a significant deterioration in U.S.-Chinese relations in the 2010-11.

The third angle is much more subtle: Culture and People. China is one of the major movers and shakers on the world economic, trade and political forums and yet its Human Rights record is far from normal. As a society, putting fetters to free flow of information may stunt the societal growth. China’s idea of having its own “The Truman show” would be a unviable and unsustainable experiment which could only results in a stunted society and unrest amongst the educated masses, the best representation of which is the students’ unrest which caused the Tiananmen square massacre in 1989.
The “Chinese Wall” may not be required to break but it definitely needs to allow free access of information across its borders for a better Chinese future.

This page result on Google Images is “Censored” information in Chinese Mainland.

Sino-Google Conflict (Part II): Plain Business!

Posted in Industry updates, Internet and Search by Manas Ganguly on January 18, 2010

The conflict apart, China is one of the largest markets that Google caters to globally.There are hardcore business interests that Google is putting on the line. This post is about the search business and the view that other internet companies could take of the Sino Google conflict.

Chinese citizens have urged Google not to leave China. This Picture taken outside the Google Headquarters in China shows people offering flowers with notes such as “Dont Go, Google”

Google is generating $200 million in annual revenue from China. Annual search revenue in China is estimated to be more than $1 billion. Google controls about 31.3 percent of the Chinese search market, versus 63.9 percent for local search powerhouse, Baidu Inc, according to Analysys International. Annual search revenue in China is estimated to be more than $1 billion. Google’s second-place standing in China means it won’t feel an immediate sting if it does close shop there. Analysts estimate revenue from China to be a fraction of the roughly $22 billion in annual revenue Google generated in 2008. Shares of Google dipped 1.3 percent although an executive described China as “immaterial” to its finances. Shares in Baidu, Google’s main rival in China, surged 7 percent

However, with growth slowing in mature markets such as the United States, Google needs all the sources of growth it can find and China is a strategic market for most technology companies. This decision does not necessarily mean Google will abandon China entirely, as it could follow the footsteps of other U.S. Internet companies that have chosen to partner with local companies instead of maintaining their own sites. In 2005, Yahoo Inc handed over exclusive rights to the “Yahoo China” brand and folded its Chinese mail, messaging and other operations into the Alibaba Group, in a $1 billion deal that gave Yahoo a 40 percent stake in Alibaba. In 2006, eBay Inc folded its Chinese operations into a new venture controlled by a local partner, Tom Online as it switched tack in a fast-growing market where it has struggled.

It is highly unlikely that Google would get any support from other internet majors in China. Microsoft for instance has huge investments planned up for China. Yahoo cannot risk its relationship with the Chinese to fall out either as it also has significant vested interests in Thus both Microsoft and Yahoo could be reluctant to take any steps seen as hostile at the risk of endangering its wide-ranging interests in China.

China’s three oldest major Internet firms, Sina, Sohu and Inc, all operate e-mail services in China and are careful to steer clear of content and other actions that could raise the ire of government censors. From their original roots as Web portals, all three have diversified into other services, from online games and e-commerce to mobile added-value services and search. Given their almost 100 percent reliance on the China market, the trio would be the least likely to join hands with any movement by Google.

In the search arena, Google’s main China rival, search engine Baidu, self-censors itself in accordance with Chinese law to avoid sensitive, mostly political, topics.Like Sina, Sohu and NetEase, Baidu would be highly unlikely to Google in standing up to Chinese censors due to its near-total reliance on the China market for all its business.

Analysts have said that working with a local partner in China could help Google get a better competitive footing in a foreign market with different languages and customs.

The wait is now for who blinks first. The Chinese government will be under pressure from international business, the American lobby, its own consumers and more. A compromise solution could also expose Google to some criticism after having taken the stand it would not countenance Chinese censorship.

We will watch the space.

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Sino-Google Conflict (Part I): The What and How?

Posted in Internet and Search by Manas Ganguly on January 17, 2010

Google has shaken and stirred the Hornet’s nest in China by threatening to pull out of China in wake of continous hacking attempts which are apparently government controlled and censorship attempts of the Chinese government on Google search results.

Google Inc delighted free-speech advocates as it threatened to pull out of China over censorship and may shut its Chinese-language website because of cyber attacks, but the move upends one of Google’s most important growth initiatives. Google’s decision is tantamount to exiting the world’s largest Internet market, with more than 360 million users, since it is highly unlikely the Chinese government would allow Google to operate an unfiltered search engine. This follows Google’s discovery Mid December 2009, where it detected that a highly sophisticated and targeted attack on its corporate infrastructure was originating from China that resulted in the theft of intellectual property from Google. However, it soon became clear that what at first appeared to be solely a security incident — albeit a significant one — was something quite different.

The results of Google’s investigation into this attack yielded the following results:
1.First, this attack was not just on Google. 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.
2.Secondly, attackers were trying to access the Gmail accounts of Chinese human rights activists. According to Google, this objective was not met through the attacks.
3.Third, accounts of dozens of US-, China- and Europe-based Gmail users who are advocates of human rights in China appear to have been routinely accessed by third parties. These accounts have not been accessed through any security breach at Google, but most likely via phishing scams or malware placed on the users’ computers.

Google has also shared information about these attacks with a broad audience not just because of the security and human rights implications of what we have unearthed, but also because this information goes to the heart of a much bigger global debate about freedom of speech. Google has now stated that it will carefully monitor conditions in China, including new laws and other restrictions on our services. Google has stated that if it was unable to achieve the objectives outlined, Google would not hesitate to reconsider its approach to China and close down the

Google’s China Timeline
Google’s troubles in China are not unique and have affected other companies seeking a foothold in the huge Internet market.
Following are some key developments in Google’s bumpy foray into China:
2000 – Google develops Chinese-language interface for its website.
2002 – becomes temporarily unavailable to Chinese users, with interference from domestic competition suspected.
July 2005 – Google hires ex-Microsoft executive Lee Kai Fu as head of Google China. Microsoft sues Google over the move, claiming Lee will inevitably disclose propriety information to Google. The two rivals reach a settlement on the suit over Lee in December.
Jan 2006 – Google rolls out, its China-based search page that censors search results in accordance with Chinese rules. Google says it made the trade-off to “make meaningful and positive contributions” to development in China while abiding by the country’s strict censorship laws.
Aug 2008 – Google launches free music downloads for users in China to better compete with market leader Baidu Inc.
March 2009 – China blocks access to Google’s YouTube video site.
June 2009 – A Chinese official accuses Google of spreading obscene content over the Internet. The comments come a day after, Gmail and other Google online services became inaccessible to many users in China.
Sept 2009 – Lee resigns as Google China head to start his own company. Google appoints sales chief John Liu to take over Lee’s business and operational responsibilities.
Oct 2009 – A group of Chinese authors accuses Google of violating copyrights with its digital library, with many threatening to sue.
Jan 2010 – Google announces it is no longer willing to censor searches in China and may pull out of the country.