[Infowarrior] - Google Shuts China Site in Dispute Over Censorship

[Richard Forno]

March 22, 2010
Google Shuts China Site in Dispute Over Censorship
By MIGUEL HELFT and DAVID BARBOZA
http://www.nytimes.com/2010/03/23/technology/23google.html?hp=&pagewanted=print

SAN FRANCISCO — Just over two months after threatening to leave China  
because of censorship and intrusions from hackers, Google on Monday  
closed its Internet search service there and began directing users in  
that country to its uncensored search engine in Hong Kong.

While the decision to route mainland Chinese users to Hong Kong is an  
attempt by Google to skirt censorship requirements without running  
afoul of Chinese laws, it appears to have angered officials in China,  
setting the stage for a possible escalation of the conflict, which may  
include blocking the Hong Kong search service in mainland China.

The state-controlled Xinhua news agency quoted an unnamed official  
with the State Council Information Office describing Google’s move as  
“totally wrong.”

“Google has violated its written promise it made when entering the  
Chinese market by stopping filtering its searching service and blaming  
China in insinuation for alleged hacker attacks,” the official said.

Google declined to comment on its talks with Chinese authorities, but  
said that it was under the impression that its move would be seen as a  
viable compromise.

“We got reasonable indications that this was O.K.,” Sergey Brin, a  
Google founder and its president of technology, said. “We can’t be  
completely confident.”

Google’s retreat from China, for now, is only partial. In a blog post,  
Google said it would retain much of its existing operations in China,  
including its research and development team and its local sales force.  
While the China search engine, google.cn, has stopped working, Google  
will continue to operate online maps and music services in China.

Google’s move represents a powerful rejection of Beijing’s censorship  
but also a risky ploy in which Google, a global technology powerhouse,  
will essentially turn its back on the world’s largest Internet market,  
with nearly 400 million Web users.

“Figuring out how to make good on our promise to stop censoring search  
on google.cn has been hard,” David Drummond, Google’s chief legal  
officer, wrote in the blog post. “The Chinese government has been  
crystal clear throughout our discussions that self-censorship is a  
nonnegotiable legal requirement.”

Mr. Drummond said that Google’s search engine based in Hong Kong would  
provide mainland users results in the simplified Chinese characters  
used on the mainland and that he believed it was “entirely legal.”

“We very much hope that the Chinese government respects our decision,”  
Mr. Drummond said, “though we are well aware that it could at any time  
block access to our services.” Some Western analysts say Chinese  
regulators could retaliate against Google by blocking its Hong Kong or  
American search engines entirely, just as it blocks YouTube, Facebook  
and Twitter.

Google’s decision to scale back operations in China ends a nearly four- 
year bet that Google’s search engine in China, even if censored, would  
help bring more information to Chinese citizens and loosen the  
government’s controls on the Web.

Instead, specialists say, Chinese authorities have tightened their  
grip on the Internet in recent years. In January, Google said it would  
no longer cooperate with government censors after hackers based in  
China stole some of the company’s source code and even broke into the  
Gmail accounts of Chinese human rights advocates.

“It is certainly a historic moment,” said Xiao Qiang of the China  
Internet project at the University of California, Berkeley. “The  
Internet was seen as a catalyst for China being more integrated into  
the world. The fact that Google cannot exist in China clearly  
indicates that China’s path as a rising power is going in a direction  
different from what the world expected and what many Chinese were  
hoping for.”

While other multinational companies are not expected to follow suit,  
some Western executives say Google’s decision is a symbol of a  
worsening business climate in China for foreign corporations and  
perhaps an indication that the Chinese government is favoring home- 
grown companies. Despite its size and reputation for innovation,  
Google trails its main Chinese rival, Baidu.com, which was modeled on  
Google, with 33 percent market share to Baidu’s 63 percent.

The decision to shut down google.cn will have a limited financial  
impact on Google, which is based in Mountain View, Calif. China  
accounted for a small fraction of Google’s $23.6 billion in global  
revenue last year. Ads that once appeared on google.cn will now appear  
on Google’s Hong Kong site. Still, abandoning a direct presence in the  
largest Internet search market in the world could have long-term  
repercussions and thwart Google’s global ambitions, analysts say.

Government officials in Beijing have sharpened their attacks on Google  
in recent weeks. China experts say it may be some time before the  
confrontation is resolved.

“This has become a war of ideas between the American company  
moralizing about Internet censorship and the Chinese government having  
its own views on the matter,” said Emily Parker, a senior fellow at  
the Center on U.S.-China Relations at the Asia Society.

In China, many students and professionals said they feared they were  
about to lose access to Google’s vast resources.

In January, when Google first threatened to leave China, many young  
people placed wreaths at the company headquarters in Beijing as a sign  
of mourning.

The attacks were aimed at Google and more than 30 other American  
companies. While Google did not say the attacks were sponsored by the  
government, the company said it had enough information about the  
attacks to justify its threat to leave China.

People, inside and outside of Google, investigating the attacks have  
since traced them to two universities in China: Shanghai Jiao Tong  
University and Lanxiang Vocational School. The schools and the  
government have denied any involvement.

After serving Chinese users through its search engine based in the  
United States, Google decided to enter the Chinese market in 2006 with  
a local search engine under an arrangement with the government that  
required it to purge search results on banned topics. But since then,  
Google has struggled to comply with Chinese censorship rules and  
failed to gain significant market share from Baidu.com.

Google is not the first American Internet company to stumble in China.  
Nearly every major American brand has arrived with high hopes only to  
be stymied by government rules or fierce competition from Chinese  
rivals.

After struggling to compete, Yahoo sold its Chinese operations to  
Alibaba Group, a local company; eBay and Amazon never gained traction;  
and Microsoft’s MSN instant messaging service badly trails that of  
Tencent.

Google’s departure could present an opportunity for Baidu, whose stock  
has soared since the confrontation between Google and China began. It  
could also give a chance to Microsoft, a perennial underdog in  
Internet search, to make inroads in the Chinese market. Microsoft’s  
search engine, Bing, has a very small share of the market.


Miguel Helft reported from San Francisco, and David Barboza from  
Shanghai. Steve Lohr contributed reporting from New York.