Google Pulls Out of China

Last week, Google officially announced plans to pull their giant search engine out of China, instead basing Google.cn’s servers in Hong Kong.  Chinese internet users will still be able to search Google.cn with a redirect to Google.com.hk, where unfiltered results will be presented in simplified Chinese.  This is all a bid to avoid China’s demand that Google self-censor their search results.  After a phishing attack in January, which Google blamed on servers in China, they had had the last straw and have been working to move all Chinese mainland search facilities to Hong Kong.

There may be other reasons; it’s well known that Google.cn is only the second-ranking search engine in China, and Google may be crying censorship in order to cover up all of their other failings in the market – and by moving out of China altogether, it now is no longer their fault if their search engine does not succeed as well as in the rest of the world.

Needless to say, China is not impressed with Google’s avoidance of their demands.  Google’s move is, according to their site, perfectly legal, but what might be the consequences?

For Google’s Partners

Google’s partners and affiliates in China have been awaiting this news with some anxiety, even reporting lowered sales up to the decision date and afterwards.  The Chinese government may lash out not just at Google but at those partners, blocking their websites as well.  The government has already warned them that even if Google fails to censor their results, they are still required to do so.  For those that sell advertising on Google, the situation is even worse, as now they will have to find alternate venues for their ads.

Previous to Google’s decision, twenty-seven of their partners in China had composed a letter, demanding answers about Google’s actions.  Many of them had already prepaid for advertising slots and undoubtedly the loss of Google would mean a huge loss of revenue and potential layoffs.  The companies have demanded satisfaction and Google has yet to respond.

For Google

Google’s move out of China is an attempt to have search their way, but it may not in fact work out as neatly as they plan.  We’re big supporters of search without censorship, but Google is turning its back on a huge potential market and essentially putting the fate of their search in the hands of China’s firewall.  With China’s huge and growing user base, Google is potentially losing thousands of customers and taking a hit to their reputation as well.

This is especially true given their almost complete lack of response to their partners and employees in China.  They finish their blog post saying:

Finally, we would like to make clear that all these decisions have been driven and implemented by our executives in the United States, and that none of our employees in China can, or should, be held responsible for them. Despite all the uncertainty and difficulties they have faced since we made our announcement in January, they have continued to focus on serving our Chinese users and customers. We are immensely proud of them.

This statement completely ignores the difficulties that these people will face, such as probable loss of income, if not jobs, and stigma from the government and future employers.  On the other hand, Google is taking a stand against censorship that, as people who enjoy freedom of the internet, we can’t disagree with.  As a marketing move, however, Google may have made the wrong choice this time.