Today many people in China are sad. Who’s sad? The people in China who most strongly support Google. These people were excited about Google’s services- search, docs, wave, android, chrome, and all the other services that were yet to come. Google could do no wrong in their eyes, and they were ready to be the early adopters of any service, be it alpha, beta, or product, that Google would deploy. They would use Google Wave even though the first version barely limped along and still think it was the coolest thing on earth. They would install a Chrome browser and every update the minute it became available. Why are they sad? They’re sad because they believe Google’s bold move towards the Chinese government means the end of Google in China.

With its bold statement towards the Chinese government, Google basically closed their doors in China. Business tactics that may work in countries like the US do not work in China. In China there is a strong feeling about building relationships. There is a strong feeling about “saving face”. There is a strong culture and history that the people are very proud of.

Sure there are problems. And yes there are problems that need to be fixed. But the question that arises is what is the best way to go about it.

I wrote a blog post about how to do business in Asia. In this post I summarized the lessons that could be learned from President Bill Clinton’s visit to North Korea to release the US reporters. Bill did not prove that he was right and North Korea was wrong. Instead, he approached the government with respect and he approached them in a way that was aligned with their culture. Bill gave them a path to change their position without losing face. By doing this, Bill achieved a result that many thought was impossible. North Korea released the US reporters to the US.

Unfortunately, Google did just the opposite today. They brought US tactics to the Chinese government. Not any US tactics, but US tactics that are against the grain of Chinese culture. They did not show respect. They did not allow a path for “saving face”. They did not build the relationship.

I am a big fan of Google. I use their services. I use their browser. I’m excited about their experimentation with web-based operating systems. I’m also proud of them for taking a position with their principles. I just don’t understand the strategy behind this move. Are they expecting to be successful in China? Are they okay with losing the Chinese market? Will they get enough benefit from other parts of the world to make up for the loss in China? Will they catalyze a larger movement?

I agree with some points that Sarah Lacy made in her post on this topic. Robert Scoble wrote a post in response on the push and pull of China. He discusses the tensions that businesses face when working in China. He takes a negative view of the way business is done in China. However, I would argue that there are positive sides too. My main point is that any government has good points and bad points, so we must take a balanced view. I have worked with and managed people in China and I have colleagues and close friends there. They are not sitting around feeling repressed. They are innovating, they are creating, they are working hard, and they are hopeful about their future.

In any case, let me speculate a bit about the potential business impacts.

  1. Companies will be hesitant about advertising on Google China, which will hurt Google’s current business in China. Until now, companies inside and outside of China have used Google advertising as an onramp into the China market.
  2. Google will not be able to re-enter the China market easily because it will be difficult to rebuild relationships.
  3. Google will have trouble recruiting top talent in China because they have lost some credibility and people don’t want to join a company whose future in China is uncertain.
  4. There will be opportunities for others to enter the market in China: Not only Baidu, but also incumbents like QQ and Microsoft Bing.

This also raises some interesting questions: Can Google succeed without a presence in China? Will this make Google less of a powerhouse worldwide? Will this allow Microsoft to regain ground from Google?

One of my colleagues told me about some advice he had gotten early in his career. His mentor asked him “Do you want to be right or do you want to be effective?” I commend Google for standing up for its principles. Google is a powerhouse. I would like to see them take the approach of being effective.

I’d love to hear your thoughts!

48 Responses to “The impact of Google’s bold move”

  1. [...] This post was mentioned on Twitter by Lara Mulady, SiliconBeachTraining. SiliconBeachTraining said: RT @susiewee: The impact of Google's bold move http://bit.ly/8uoTEf #Google #China [...]

  2. Sometimes, doing what’s right is more important than being “effective”. I am not sure what Google is doing now is “right”, but I do know that helping censor the internet is never right. Maybe it’s “effective” for doing business in China, and in some cases could be considered a necessary evil, but it is never -right-. Giving out information about human rights activists, or anyones private emails, is not right.

    • Ah- I should have expanded the last paragraph. The choice is not between *doing what’s* right and being effective. It is between *being* right and being effective. You should do what’s right and fight for the right causes. The question is what is the best way of achieving it. Is it by confronting the other party and telling the other party they’re wrong? Or is it by finding another way? Different approaches fit different situations, it will be interesting to see how this works out! It’s already getting interesting now that the governments are making statements!

  3. Social comments and analytics for this post…

    This post was mentioned on Twitter by susiewee: The impact of Google’s bold move http://bit.ly/8uoTEf

  4. >They brought US tactics to the Chinese government. Not any US tactics, but US tactics that are >against the grain of Chinese culture. They did not show respect. They did not allow a path for “saving >face”. They did not build the relationship.

    very well put. i realized this is what made me so angry when i wrote my comment on the situation this morning: http://www.web2asia.com/2010/01/13/google-to-retreat-from-china/

    • Nice post, George. It is interesting to think about who needs who between Google and China. Those are some of the questions I raised in the 2nd to last paragraph. It will be interesting to see the result!

  5. Of late I have noticed a lot of weird Chinese spam on my blogs and in my Gmail account. I do not speak Chinese, so I have no idea whether they are saying Merry Christmas, fuck off, or trying to hack my bank account. Europe is awash with cheap Chinese goods, and many people have lost their jobs because of China, so don’t expect much sympathy in the west if China is going to attack Google. If China wants to start a cyberwar then we are ready for you, guys. Free Tibet, BTW!

  6. Fascinating post and I think you have “nailed it”. From my own travels in China, i’d agree. Google could have used this as an opportunity to engage with the Chinese government but instead it’s made this move a very public one. We don’t know all the facts yet of course, so there is still lots of play out. We may never know the back-story, however.

    • Yes, we don’t know all the facts and we will never know. It is interesting in how different the reaction is of the people in China and the people in the US due to the deep cultural differences. Have you heard the reaction from the people you know in China?

  7. [...] Btw: Here is another post that shares most of my take on the situation: http://chinayouren.com/en/2010/01/13/2718.  This post gives very up to date background infos on the Chinese Internet market: http://english.caing.com/2010-01-11/100107092.html. And last but not least here is a great point made about bringing US business practices to China, which is part of the reason that made me so angry when writing my post: http://www.susiewee.com/blog/2010/01/13/the-impact-of-googles-bold-move/ [...]

  8. Ok. Asia, and China, is a different culture. And we must accommodate Asia and China when we trade and interact with them. However this MUST be a two way relation. When will China make a step, a small CONSISTENT step, to recognize and accommodate the Western values?

    About saving face. Hm, only China has a “face”? When intellectual propriety got stolen and copied and sold in cheep Chinese products, still China has a face to be protected? Interesting way to judge…

    • Yes, two-way is key to any relationship. Someone said that the best partnership is when both parties do 80% of the work. Each must understand the other culture and the different perspectives that result. There is clearly room for improvement all around on this front.

      By the way, I am certainly not defending hacker attacks or security breaches. My intent in the post was to raise some thoughts on the approach that is being used to achieve the goal, not to state whether the goal is right or wrong. That’s a much more complex issue.

  9. I agree with you point about saving face, but building relationships sounds like a breading ground for corruption

    • Using relationships in a corrupt way is clearly bad, but building relationships is important for nearly everything you do. It is clear that Google has a good relationship with the US government, as they should. It helps them be effective and have greater impact. Maybe it’s better to say: Build relationships and use them for good! ;-)

  10. Respectfully: you’ve missed something here.

    You (rightly) couch this move in terms of relationships, but it is not Google failing on that front. I would argue China is the one who failed to build the relationship with Google, and like any bad relationship, it must be concluded.

    It is China which continues to censor; China which is undertaking cyberattacks on its citizens; China which is responsible for any shame now being brought upon it. Not Google.

    Google has, as do you and I, a moral obligation to fight China’s institutionalised oppression. It is not for Google to adopt Chinese practices; it is for China to join the rest of the world and cast off its shameful traditions. Otherwise it is being an enabler, a slippery position Google has rightly decided to end.

    Your business impact arguments are also flawed: Google will be able to easily re-enter the Chinese market, why wouldn’t it? Its product is excellent and relationships can be rebuilt. And hiring top talent is a function of professional challenge and financial incentive, both of which Google can deliver effortlessly.

    You write: “My main point is that any government has good points and bad points.”

    This is true. But don’t lose sight of what the ‘bad points’ are in this case, and what they actually represent.

    • Thanks for your comments. Relationships require two to make them work. They’re also deep and complex, and you never know what goes between the two, so you can’t judge as an outsider. Only the parties involved can decide whether the relationship should be concluded or should go on.

      I respectfully differ on your thoughts about how easy it will be to re-enter the market, rebuild the relationship, and hire based on professional challenge and financial incentive, as it’s a very western view. In China many (but not all) people choose their company based on its reputation. Many workers are “only children” who have the pressure to make their parents proud, so the reputation of the company comes into play there, too.

      Now, we can play out the other scenario. Let’s say Google’s bold move somehow creates a larger change that helps China achieve a more open internet and more personal freedoms. If that happens then Google could end up being a big hero. It’s just hard for me to imagine the Chinese government succumbing to the hardball play, as it would establish a tough precedent. But let’s see- I’ve been wrong before!

  11. Hi Susie,

    Great post. I think the one thing we can agree on is that this is a bold move by Google – its a very strong line and will be received that way by the Chinese authorities. Whilst we should applaud Google for its stand – there is no case for systematic state infiltration of private email accounts – I can help but feel disappointed by the likely eventual outcome.

    The Chinese authorities aren’t going to budge – this is Google out of China. The question is, what does this mean? Is the world going to be a better place with the Chinese out of Google? I currently can’t see any benefit in a world divided along Google vs Baidu lines, especially as those boundaries map directly onto existing cultural, linguistic and historical lines.

    Google has a mission, ‘to organise the world’s information and make it universally accessible and useful’. There’s one almighty roadblock in the way of this now.

    Hung

    • Yes, I agree the question is what does this mean? After Google there is Baidu. But the players will evolve more, as QQ is working on search and there is Bing.

      Wow- it is very touching to be reminded of their mission. It would be very sad if Google could no longer drive towards its mission.

      I have friends around the world, including in China. I would be so sad if I was cut off from them on the internet. China can not be an Internet island. That would not serve anyone well.

  12. [...] One last one, from one of HP’s CTOs @susiewee The impact of Google’s bold move http://bit.ly/8uoTEf perspective of someone who works w/CN. Nice! Why I Believe Printers Were Sent From Hell – [...]

  13. [...] One last one, from one of HP’s CTOs @susiewee The impact of Google’s bold move http://bit.ly/8uoTEf perspective of someone who works w/CN. Scobleizer: Sorry, CocaCola social media policy is here: [...]

  14. [...] Also see reactions from around the blogosphere. [...]

  15. Why when dong business in China does Google have to approach them in a culturally sensitive way? Why is there no responsibility for China to view Google’s actions in a culturally sensitive way? One could argue that the core determinate of who defers to who is based on the relative power position.

    We can also assume that Google has enough info to know the business norms of China. Therefore, Google’s actions aren’t wrong because they aren’t “like the Chinese”. We should instead assume that Google’s actions are intentional. So, they are only wrong if they aren’t actually in the position of power that their tactic implies.

    • You raise a good question. Is cultural sensitivity required? I was assuming yes, but hmmm…

      Today the news shows that Google has the US government which considerably raises their position of power. Let’s see how their tactic plays out.

  16. Dit it ever occur to you, that the Chinese Government broke the Relationship in the first Place?

    They were hacking and spying and cheating.

    In a way Google’s move was the only way to keep face for Google itself.

  17. Clearly, the evidence shows that Google is not being effective. The internet is becoming less free, not more. Engagement isn’t working. In this kind of environment, the only honorable thing to do is to stop collaborating. Otherwise, you are just an enabler of a party that believes people calling for free elections deserve 11-year prison sentences.

  18. My thoughts: Love the Chinese people, love the culture, FUCK the Chinese government. Google is bold and taking a stand where no big governments are.

  19. I strongly disagree that Google has not been respectful to the Chinese Government. Perhaps they just got fed up of 4 years of kowtowing, and all the time withstanding attacks, commercially from local businesses favoured by Beijing, as well as from the unnamed hackers (which everyone has assumed is the Government).

    You have to draw the line somewhere, and Google has done it. They’ve tried. I am quite certain they have been negotiating behind the scenes for months with the bureaucrats in Beijing. By leaving in this way leaves their head held high and maximises the PR advantage for them, as well as bringing attention to the worsening conditions for Western businesses in China. They may have offended the Chinese government, but why should ordinary Chinese be offended? They should be offended by their Governments actions – censoring their access to internet content.

    I love China but like thousands of others am increasingly frustrated by China behaving however it likes and no one being able to stand up to them for fear of causing a “loss of face”. As another commenter says, “When will China make a step, a small CONSISTENT step, to recognize and accommodate the Western values?”

    • Good points here, especially on bringing attention to the worsening conditions for Western businesses in China. By the way, I don’t think the people are offended… rather just sad… sad like in losing a good friend.

  20. Well say, Susie.

    What Google does is right, but not smart. They could use what they found as negotiation chip in gaining more business. Instead, public humiliation to Chinese government will only back fire.

    By the way, Chinese government and Chinese people are two different things :) Chinese people are friendly, working hard, full of hope. Chinese government is………….

    • Great point. I wonder if they tried to use what they found as a negotiation chip. And yes, we should differentiate the people from the government in the discussion. Thanks.

  21. [...] Another opinion by Susie Wee, her “main point is that any government has good points and bad points, so we must take a balanced view”. [...]

  22. I’m Chinese, I support Google’s bold desicion
    why I don’t have the rights to use Youtube, Blogspot in China?
    The Chinese government has two reasons to blcok some service
    one reason is the Gov doesn’t wanna Chinese people get some info which can harm CCP
    another reason is they can protect the domestic business like youku.com
    No matter what the reason is, it’s not fair for the Chinese people, so I have to use freedom gate to bypass the censorship, what an evil Gov it is!!!

  23. When it comes to build relationship, I must say that it’s horrible, we call it “Guanxi”, if you have “Guanxi” ,it’s very easy for you to do business, so all the people are busy establishing “Guanxi”, that’s the reason that Chinese society becomes unfair, you can bribe to set up “Guanxi” with others, the excellent person always replaced by a moron who has “GuanXi” so do you think that that’s a healthy society?
    do you think that you can earn money immorally in China through “GuanXi”? yes, many people do business this way in China, like the polluted milk last year!!!
    So Google is quite right ,because Google has moral

  24. Hi Susan,

    I think it’s slightly ridiculous that you weigh out the entirety of Google’s decision as a business move. They obviously do not care about any business face or front; rather morals of freedom. It’s not like they’re children playing in the industry — they’re industry *leaders*. The fact you centralize your argument around showing respect to the Chinese culture is really biased and fairly ignorant.

    Missed high five!

    • Thanks for your comment. I am not at all against the principle. I am mainly discussing the approach used to achieve it. Many approaches can work, so let’s see how things play out.

  25. I liked the overall context of this blog. And many points are valid, solid and quite true.

    But I have a few sore points. While respect and mutual understanding is critical in any business, there is no substitute for Human Rights. You are as good as proposing to deal with the devil in a compassionate manner. And the example of Clinton and N Korea? N Korean leadership is a bunch of thugs, thieves and murdering psychopath especially the so called “Great Leader”. Respect? Show face? That is a load of crock. Its like saying Churchill should have gone to Hitler and respectfully requested to back off and let the prisoners go. Nonsense! Regimes like North Korea and its leadership should be exterminated because they are a poison. After years of kow-towing, what exactly has been achieved? NOTHING! N Korea still does what it feels like while showing the middle finger to the world. And Chinese government is loathe to put pressure on the last 2 known communist state (Cuba is the other). And from a layman’s point of view? I think the Chinese leaderships wants this crazy dictator to rattle sabres because that keeps the focus distracted for the world on other matters.

    Google may be showing the bird to the Chinese government and perhaps will have very severe consequences. But when did doing the right thing ever be without consequences? In our age and day, we have rarely come across these type of actions. And perhaps, more companies should follow suit. Of course, the problem is how to distinguish between principle and preachy! No one likes to be out-gunned and outflanked with arrogance.

    And to make a tangent connection, look at the quagmire create by the American leadership in Afghanistan and Iraq. But that’s not surprising. When you have a bunch of lying morons in leadership positions, you end up with 100K civilian deaths, thousands of soldiers dead and a global pandemic of terror which makes you want sit in front of a TV and never leave the house.

  26. Many people seem to be upset about the actions of the Chinese govt. I would also like to point out that the US govt also partakes in electronic espionage, but in the name of fighting terror. Also, gaunxi does result in bribery. But, building “relationships” in US politics and business often also involves forms of bribery (country club memberships, free tickets to games, political contributions, acceptance of kids into prestigious schools, TARP handouts, etc). People should be careful when speaking from their moral high ground implying that the US is a moral standard to hold other countries and cultures. Many of these “dissidents” maybe are considered by the Chinese govt as “terrorists” (a term the US has popularized). Similarly, I’m sure there are countries and people who consider US electronic espionage targets as non-terrorists. I’m not condoning what China did nor am I saying that the US shouldn’t do what it is doing, but people judging other govt’s based on what they’ve read in the US news or US accounts of “history” should be very careful.

  27. [...] The impact of Google’s bold move [...]

  28. I will not comment further about morality, because I also agree with most comments (well but the one saying roughly that US morality is valid for everyone). I am also pretty sure that there were plenty of talks between Google & the chinese governement before the new Google position went public.

    What I would like to underline is that whether Chinese culture is different from western ones or not, some Chinese organization cyber-attacked Google infrastructure. A non-moral but politically correct statement is that each government edicts & apply its own laws for its own country. Chinese organization crossed that line, by acting on non-china territory. This is nothing less than a cyber-war act. In French we say something like “that is the tear drop that overflows the vase”.

  29. *lol
    Let a child try some cookies, appease the parents by leaving out the chocolate chips, then wait till the parents make a profound mistake and use that situation to tell the child that it can’t get cookies any longer, because the parents misbehaved. Guess what the childs reaction is? ;)

    Do you really think China will ever change just by discussing “respectfully” with the politicians?

    • Nice little story.

      Certainly creating change requires very artful interactions. Being respectful does not mean being passive or agreeable. I think you can create change by being assertive and respectful. Admittedly, I’m an optimist. ;-)

  30. Thank you all for your comments. I appreciate your different viewpoints and the discussion!

  31. Right or efficient is not the issue here. The issue here is that fundamental principles within business here has been violated. If a firm should be afraid of industrial espionage then their is no reason to stay in that country any more. Google has drawn the line here. That means that there is no way to be efficient if all their tools(source codes and Math also called algorithms) are being stolen by the government. This is not about culture but about fundamental business ethics. It is the government’s responsibility to create a safe and stable environment to do business in. Here we clearly see that the Chinese Government has failed badly. Forget about the culture, forget about all these diversions about how to do things right in China. They are just tools made up to make naive foreign investors agree on paying more, accepting more etc. China is full of people like in the rest of the world. The have feelings and interests like the rest of the world. The Chines Government has financial interests like the rest of the world. This is about acquiring technology and knowledge which is strategically useful for the government and government owned firms in China. Nothing else. This is the true hard facts no one dares to speak out aloud.

  32. I struggle with the fact that if we ALWAYS play by China’s cultural rules, it is a one-way relationship that yields few if any results. Sure we may save a hostage here or there, but funny how the situations keep occurring. What is best for Google and business in general in China, not just the people, is a change is in the ways of the Chinese Government. Sometimes only the light of day can change behavior. I find it interesting that the world’s most popular blogger, Chinese himself, is blatantly flipping off Chinese officials in their face (literally). Even the Chinese government is afraid of losing the hearts and minds of its people. Perhaps what Google did will hurt them now but may help everyone in the long term. Obviously, as I think you agree, it is a delicate balance.

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