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Google Granted Permission to Open Office in China?

By - May 05, 2005

GooglechinaI’ve been watching this issue for a while – nothing tests a corporate maxim such as “Don’t Be Evil” as the China Question. From Paid Content we learn that Google has been granted the right to open an office in mainland China. From the source, Interfax China:

Chinese authorities have green-lighted Google’s plans to open the company’s first office in Mainland China, which will allow the world’s largest search engine to further localize its operations, but will also significantly intensify competition in China’s online search market, analysts said.

“Google has been granted approval to open an office in China, but has not hired any staff in China yet,” a Google source told Interfax. “Google has also started operations of www.google.com.cn.”

Although Google has operated a Chinese language search engine since September of 2000, the company had previously been forced to run its China business out of an office in Hong Kong, which hindered its ability to market advertising services via its search engine to Mainland Chinese companies. Google’s businesses in China have mainly been limited to self-help advertising services such as Google AdWords and Google AdSense.

The article goes on to claim that Google has hired Victor Koo, former COO of Sohu, to head up its mainland offices. So far the only other mention I have found of this is the SF Chronicle, which ran a brief and got a “no comment” from Google.

Now, Google has not exactly crowed about these moves to me or any other press folk, and it’s entirely possible this report is inaccurate. But I don’t think it is. I have a ping into Google PR to find out more.

I saw down with Sergey in February to discuss the China question, and I found his remarks cautious and considered. I report them in the book, but given that this is breaking now, I thought you might enjoy a bit of a preview. A few tidbits from the text:

“China is a curious hybrid, a miscegenation of Leninist institutions and political structures imported and established in the 50s during the Stalin era and a more recent importation of dynamic market structures and values,” said Orville Schell, a China scholar and Dean of the Graduate School of Journalism at the University of California Berkeley. “There has been great economic reform since the Maoist era, but much less political reform.”

China represents a great paradox for a democratic business culture – its political culture is repugnant, but its market is far too rich to ignore. “As businesses contemplate entering the China market and begin their processes of due-diligence, most of them have actually already made up their minds: They cannot but be in China,” Schell noted.

….

Google has not yet made this decision, at least not publicly.

For years, Google has provided millions of Chinese citizens its service in the Chinese language, but it has yet to launch an official presence in China. That means that so far, the company has not had to play by Chinese rules when it comes to censorship of its main index. It also means that for the most part, Google has been left out of China’s recent economic boom.

The text goes on to note the China/Google News tempest, earlier Chinese efforts to filter Google, and Google’s investment in Baidu, which will be its main competition, presuming it launches in China. I also note that Yahoo and others have already gone to China. But then again, they do not have such a high bar – their mottos are free of subjective statements regarding evil.

With all that in mind, I spoke with Sergey.

“We look at China with a different point of view,” Brin told me during the internationalist World Economic Forum in Davos, Switzerland in early 2005. “A lot of companies would say ‘It’s a big market, how do we get a chunk of it.’ We want to focus on how do we do the most good.”

On the one hand, Brin said, not having Google at all would be a disservice to all Chinese users. On the other hand, a censored service does run counter to his sensibilities. “You have to weigh the odds. Corporations need to be responsible. If we wrote (the Chinese laws) then I would say we were responsible for them.”

But what of people who feel that Google is failing their expectations by not standing up to China? “I am sure at various times, various people will say that we failed their expecatations,” Brin said. “I think its a good motivation to have, and I am sure we will not be perfect to everyone at all times.”



Schell, who was my Dean at Berkeley, has some final thoughts on all of this:

“What may be most important is not the single concessionary act to China, but the precedent that this act would set for Google, namely, that the level of censorship before entry in specific markets will be negotiated on a case by case basis,” Schell concludes. “If China manages to ring out such concessions, why should not another country or even some large multi-national corporation which does not like unflattering information about it flying around the Google search universe, complain – and expect concessions?”(7)

As far as I can tell, Google is still struggling to figure out how to answer its own version of the China question. But this latest news seems to imply that a decision is certainly imminent.


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One thought on “Google Granted Permission to Open Office in China?

  1. Well, Google is obviously treading towards being evil, even if it hasn’t quite crossed the line yet.

    I’m starting to wonder if we should fight back: boycotting AdWords would make them reconsider fairly quickly, if revenue was cut by 80 or 90%.

    See the post:
    http://www.gilgamesh.ca/index.php/2006/01/27/google-and-china-time-for-an-adwords-boycott/