Google to pull out of China?

After coming under a sophisticated attack by Chinese hackers who managed to steal Google Intellectual Property late last year, Google has announced that it will stop filtering web results in China. They will enter into negogiations with the Chinese government to see whether or not they can legally continue to offer a service in the country. It appears the primary target of the hacking attempt was Chinese dissidents using Google services.

Will this move pressure the Chinese government to reign in hackers within the country (Google have stopped short of blaming the government themselves, although it’s clear their enemies were the target) and perhaps even loosen internet restrictions? Or, will this amount to Google waving a white flag and surrendering the Chinese market to Baidu? Over at AlleyInsider / Business Insider Henry Blodget feels the former

Google matters in China now. The announcement that Google was threatening to pull out spawned public support for the company in China. It got Secretary of State Hillary Clinton into the act. It forced the Chinese government to respond with a statement. It has grabbed the attention of investors, as well as the hundreds of other companies that do business in China and are forced to play by Chinese rules. It will focus more public attention on the reality of China’s censorship policies than any boycott ever could have.

Below the fold excerpts from David Drummond’s blog on the subject – he reveals up to 20 large corporations were attacked and they are liaising with the US authorities..
David Drummond, Google’s Chief Legal Officer blogs ..

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. However, it soon became clear that what at first appeared to be solely a security incident–albeit a significant one–was something quite different.

First, this attack was not just on Google. As part of our investigation we have discovered that at least twenty other large companies from a wide range of businesses–including the Internet, finance, technology, media and chemical sectors–have been similarly targeted. We are currently in the process of notifying those companies, and we are also working with the relevant U.S. authorities.

Second, we have evidence to suggest that a primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists. Based on our investigation to date we believe their attack did not achieve that objective. Only two Gmail accounts appear to have been accessed, and that activity was limited to account information (such as the date the account was created) and subject line, rather than the content of emails themselves.

and ..

These attacks and the surveillance they have uncovered–combined with the attempts over the past year to further limit free speech on the web–have led us to conclude that we should review the feasibility of our business operations in China. We have decided we are no longer willing to continue censoring our results on, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down, and potentially our offices in China.

No bio, some books worth reading – The Rational Optimist: How Prosperity Evolves – Matt Ridley .

Crisis Economics: A Crash Course in the Future of Finance -Nouriel Roubini, Stephen Mihm

  • RepublicanStones

    So it takes an act of hacking for Google to grow a consicence. Isn’t the company’s unoffical motto something corny like ‘Don’t do/be evil’? Signing the Orwellian contract with the Chinese govt in the first place wasn’t exactly good. I’d be surprised if they agree a workable idea with the Chinese authorities. The state run search engine ‘Baidu’ is the most popular anyway isn’t ?
    Google’s share of the market was/is apparently nowhere the level it is here in the west.

  • The Raven

    RS, you are certainly correct, Baidu is the most popular. But let’s consider: Google have been in, what? 2 years? And have achieved 30% market share?

    That’s not to be sniffed at when the market is 340 million people and growing. It will still be a significant “hit” for the fledgling (in China that is) company.

  • RepublicanStones

    Fair point Raven, but if Google was censored as undoubtedly Baidu is, is there any data available reflecting the differences in search results, did the chinese afford Google any leway not on offer from the state run engine?

    If not it seems Google was ipso facto a state run search engine with a western logo.

  • The Raven

    Pretty much, RS, that would be the situation – but the brand alone would have snaffled a portion of the market share. I would say that every trendy IT geek under the age of 30 would have picked Google out of sheer curiosity of all things Western and forbidden, and to be seen with the logo.

    I had a look at Baidu there – I’ve only ever heard about it, and if I am correct, there is no English translation service incorporated into it. So even to try a cursory comparison of algorithms – you’ll need a nerd for that, and I only do marketing. 🙂 Note the likeness of one to the other, by the way. Seems Chinese knock-offs are online too. 🙂

    What might be the ramifications of the Chinese government – ok, ok, we’re in the realms of Sapphire and Steel here – saying “tell you what, Google – go ahead: uncensored searches”?

  • Paul Doran

    Chinesse censorship laws. It you take a book out in a US library on Muslim faith. You hae to report it.American is one of the most censorship Cuntries i the World.wake up an stop reading the crap you read.All Governments have censorship

  • Mack

    Paul –

    You are confusing the traceability of certain actions – with the banning of those actions. There is no great-fire wall of the USA, no websites are blocked by the US government.

    The USA goes much further than most in terms of protecting free speech. You do not have to report taking a book out of a US library on Islam to anyone, your action may well be traced though I’d be surprised if it raises heckles.

  • The Raven

    Also, Mack, I think he was drunk when he wrote it.

    And of course, Paul, there is censorship. Otherwise everything from snuff movies (if they exist) to child images would be being flogged on numerous sites.

    Having said that, I’d be interested to see just what is censored on Google’s site. I went to, and not even knowing if it work, typed in “political asylum in USA”. At least ten pages came up. I don’t know how many others there were as I can’t read the lettering. But I was surprised that as many did, the capitalist dogs!