Last month, Google received high praise from human rights supporters after threatening to exit the Chinese search market, claiming it was no longer comfortable with censoring search results per government demands. But here it is a month later and Google has made no move to withdrawal its Chinese search operations, with censored results still appearing on Google’s Chinese portal, Google.cn. In addition, the company may now be investing in a Chinese digital media company, as well. According to unconfirmed reports, the Internet giant is said to be a member of a Disney-led consortium looking to invest in a Chinese media and advertising company called Bus Online.
Google’s decision to exit the Chinese search business was alluded to in their January blog post detailing what appeared to be state-led cyber attacks which hit the Internet giant and other Silicon Valley companies in mid-December. As a result, Google announced it would review the feasibility of its business operations in China. The company claimed it would engage in discussions with the Chinese government to see if there was any way for it to remain in China, but few expected positive results from those discussions.
Because the attacks were focused on gaining access to the email accounts of human rights activists, Google received a lot of praise for taking a stand against the Chinese government, the alleged perpetrators of the hacking attempts. However, only nine days later, Google’s CEO Eric Schmidt took a softer tone during the company’s fourth quarter earnings call. “We wish to remain in China,” he said. “We like the Chinese people, we like our Chinese employees, we like the business opportunities there.”
Google to Invest in Chinese Media Company
Google does like the businesses there, apparently. It’s a month later and the company seems to be no closer to shutting down their Chinese search operations business than they were back in January. In addition, anonymous sources say Google is planning to invest in China’s largest in-bus digital media and advertising company, an outfit called Bus Online whose revenue was about 314.5 million yuan ($46.07 million) last year. A consortium led by Walt Disney Co. is reportedly in advanced talks with the Chinese company and has plans to buy a 30%-40% stake for more than $100 million in shares, both public and private. Google is said to be among the investors.
This move, if it happens, would lead credence to the argument put forth in January which had cynics claiming that Google’s withdrawal from China had less to do with their so-called “moral high grounds” propped up by the company motto “don’t be evil,” and had more to do with the fact that Google’s Chinese search business simply couldn’t compete with the more popular Chinese engine baidu.com.
Hacker Crack Down Could Help
The reality of the situation may be a bit more murky than a simple case of “good” versus “evil,” though. Of course Google couldn’t sit idly by as the Chinese government directed attacks on its infrastructure, but it also would be bad business to ignore the massive potential of the Chinese Internet market.
Yesterday, new reports from Chinaview.cn stated that the Chinese government had shut down the nation’s largest website responsible for training hackers. The implication of this news – and especially its timing, given the actual shut down occurred in November – is that the Chinese government wants to appear as if they’re “playing nice” with regards to Western interests. That move may be precisely the sort of thing Google needs in order to maintain an appearance of concern regarding the cyber attack situation while also not making a regrettable, revenue-impacting business decision by ceasing Chinese operations altogether. The only question now is whether or not the public will forgive Google for doing so.