Google close to leaving China

Google's China offices

Google has said recently that it is “99.9 per cent” sure that it will end up exiting China and closing the google.cn division of the company. I first posted an article on this topic about two months ago (click here to read it). At the time, this issue had just made it to the surface when Google decided that it would enter serious discussions with the Chinese government over its censorship laws.

Google is very much against the Chinese government censoring the internet for Chinese citizens and even using the Gmail service to hack in to their own citizens’ email accounts to gather information over activists’ protests and functions, basically spying on them. Google said that if the Chinese government does not relax its laws, then Google may be decide to leave China altogether.

Well, China has not budged one bit regarding those laws and it now appears that Google will be leaving the emerging Asian nation. For Google it could open themselves up to Chinese competitors like Baidu.com and other competitors like Yahoo or Microsoft (bing.com) as well. It could mean that whichever company ends up dominating the search engine market in China may be strong enough to show serious competition to Google world wide in the future. It is important to remember that China is expected to eventually become the world’s largest market, even ahead of the U.S., so for the future this market is crucial for sustainable growth.

However, at this point, Google put itself in a tough spot by saying earlier that if the Chinese government would not change, then the search engine giant will take its ball and go home. As a North American, I feel that this may be the right thing to do morally as the Chinese government is infringing on peoples personal privacy, but as a business person, this seems to create a big risk that could have been avoided.

Google can use its massive wealth and reach to put pressure on its non-Chinese competitors to do the same or risk aiding the oppression of human rights. This may help them compete and more importantly, reduce the risk they would be creating by leaving China. They can also launch a campaign in the western world and other free countries that is critical of Baidu.com which may make it difficult for the Chinese search engine to achieve success outside of China. These strategies do not eliminate the risk of losing its leadership in the industry but, it might be the best thing they can do to try to reduce it somewhat.