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China may have finally driven away a U.S. search company

After a turbulent time trying to cash in on an internet population of more than 300 million users, Google may leave behind China.

Google first entered China in 2000, but elected not to open an office in the country until 2005.   The company's hesitation made it lose out to other American-based companies also looking to cash in on, but it quickly rebounded and became the leading U.S. search company in the country.

According to the company, Gmail and other Google services have undergone countless attacks by unknown sources  -- it seems the email accounts of Chinese human rights activists were accessed and other nefarious actions were performed on not only Google, but other tech companies.  

“In mid-December, we detected a highly sophisticated and targeted attack on our corporate infrastructure originating from China that resulted in the theft of intellectual property from Google,” wrote Google Chief Legal Advisor David Drummond on the company's official blog. “However, it soon became clear that what at first appeared to be solely a security incident--albeit a significant one--was something quite different.”

"We have been briefed by Google on these allegations, which raise very serious concerns and questions," U.S. Secretary of State Hillary Clinton noted to reporters.  "We look to the Chinese government for an explanation.  She added "the ability to operate with confidence in cyberspace is critical in a modern society and economy," but the U.S. government still doesn't have an exact stance on the issue.

Similar to other western companies, Google adhered to Chinese government policies, and has agreed to terms of service that would not be accepted in North America and Europe.  Google, Yahoo and Microsoft all hope to have a large presence in China, but have struggled to compete with Chinese Baidu  search engine.

If Google leaves China, Microsoft and Yahoo will desperately attempt to stop those users from switching to Baidu.  Microsoft disclosed at the end of 2009 that China is the most important search market it must focus on, as Google is the No. 2 search engine behind Baidu's 63.9% control.



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"Don't Be Evil"
By trajan on 1/13/2010 10:58:48 AM , Rating: 2
I agree with Lord 666's comment above - if Google actually pulls out of China over this, it will vastly increase my respect for the company. Respect that took a serious hit after Schmidt's comments on privacy a few weeks back. I'm still not sure what bothers me more - the fact that someone so influential could be so ignorant, or the harm all that ignorance can cause.

We all know China is a huge potential market and if Google pulls out, Google will surrender a huge amount of future (potential) profit. Bravo if they put their "Don't Be Evil" motto ahead of making more cash. Showing that they have integrity and deserve the goodwill they've accumulated is going to be worth a lot more to Google's shareholders in the long run.

(Qualify all of this by recent reporting that Google has been faring rather poorly in the Asian markets. This could be part of a broader cut-and-run strategy. But I'm willing to give them the benefit of the doubt if they do the right thing here.)




RE: "Don't Be Evil"
By mrzed on 1/13/2010 1:32:58 PM , Rating: 2
Nope - this is how I read this at first too - and seems to be everyone's default assumption but it is clearly not the case.

Google was happy to play censor to get access to the market. What they had was not a change of heart based on morality, but a realization that the business/govt climate in China is threatening their intellectual property (which their entire worth is based on).

They are leaving because local operations are under threat as a side effect of the local environment - perhaps crackdowns on freedom are the motivation for the hacking, but it is the hacking and subsequent threat to assets that is the problem for Google. This is a business decision, not a moral one. People are too quick to give them the benefit of the doubt here.


RE: "Don't Be Evil"
By lco45 on 1/13/2010 5:54:40 PM , Rating: 2
I don't understand how Google is protecting its IP by closing google.cn.

I mean, hackers can still hack gmail accounts, and can still interrogate google.com.

It seems Google is really doing this for ethical reasons, strange as that seems.

Luke


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