Victor Xray on Thu, 14 Jan 2010 01:24:10 +0100 (CET)

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Re: <nettime> Google

> Here we have Google openly speaking in a refractory way about that very
> problem. The statement doesn't quite bluntly assert that the Chinese
> government is a criminal regime, but it certainly doesn't discourage that
> inference either.

I think in this case, it's a rare case of business and ethics having a happy
co-incidence. Referencing information about the Chinese online search market
shows that actually, it isn't very large, relatively, in an economic sense,
to Google revenues, and also, Google is  not the market leader there, but
rather local search company Baidu is.

I think that there's one angle from which you can consider this a rational
business decision. A particular market's government wants to insist you run
a "special operation" just for them - this is an additional expense to
maintain. Furthermore that government engages in intensive cyber-warfare
against your company's assets in order to further its domestic political
goals - imposing another expense defending yourself from attack which is
additional to any feeling of distaste you, the Google board member, might
feel about the particular domestic political goals. The icing on the cake
then has to be that the "special operation" was always a piece of bad
publicity in the wider community. You get to make a sensible business
decision to cease the special operations and harvest some goodwill as well.

Plus they are only risking this market if the regime decides to shut off all
access to Google from Chinese IP addresses. If they allow Google to continue
its business, Google wins double.

This goes to show that unethical business decisions can indeed impose a
financial penalty on a company and that ethical business decisions make
economic sense.

However I think it also highlights another story. The story of the Chinese
Behemoth. Turns out despite not being the leading the leading search engine
in China, Google is the still the leading search engine in the Asia-Pacific
region, which also I think shows China's relative market size to the rest of
Asia. The Chinese consumer market we've all heard so much about the last ten
years - bow down Western business leaders before your new rulers in the
Chinese communist party if you want a slice of the action - isn't as
almighty or all-powerful as people are commonly lead to believe. Its big, to
be sure, but its not an order of magnitude bigger than the other leading
western economies. I think we'll hear more about this when later this year
or early next at latest the Chinese regime is force to shut the tap off on
the deluge of cheap credit they are using to keep their economy flying.
There's already a massive property investment bubble that is waiting to pop,
and when it does it will cause considerable pain to the middle-classes in
the cities (i.e. the very sort of market that Google targets).


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