More big internet firms leaving China

China internet spying

Earlier this week, Google followed through on its threats to leave China as it redirected all searches from mainland China to Hong Kong. This is a very big deal to all parties involved and to the future of the internet in general. China has the most internet users in the world so for all of them to not have a local version of Google to use means that their internet will be less efficient and less useful to them.

For Google, it means that one of their largest markets and the largest future market is out of the picture for them. They will now have to rely on Japan, South Korea, India and Hong Kong for their success in Asia. As I mentioned in previous posts, it also opens them up to allowing other companies to grow within China, like Baidu.com and compete with them globally.

For the Chinese government it is a complete embarrassment and insult for major companies to be leaving the mainland because of their actions in censoring their own citizens. However, the news on this front is getting worse for the Chinese government. GoDaddy, the world leader in internet domain registrations has also said that it plans to stop registering domain names in China. It will continue to service their current customers there, but again this will result in a worse off internet for people in China. It also puts more pressure on the government to make sure their own citizens don’t begin to reject their government’s actions that have caused these big companies to leave.

I suspect this trend to continue for the near term so the questions is: what will happen to the internet in China? This can go one of two ways. Either internet in China will simply not be as good as in other countries, or Chinese entrepreneurs will start good companies that will fill the gaps. From my understanding, GoDaddy doesn’t have some secret formula that makes their success difficult to copy so it is possible to see a Chinese company emerge with success. However, copying Google is going to be much more difficult as they have a mathematical algorithm that they created and use to allow them to be as good as they are in web searches. I don’t see this being effectively copied in China and I think the people there will have to just get used to poorer search result or pressure their government to stop spying on them.