Why Google Decided to Rethink China

A Chinese Google user presents flowers to the Google China headquarters in Beijing, Wednesday, Jan. 13, 2010. AP Photo/Vincent Thian

This article was written by CNET News.com's Tom Krazit.

It once hoped to change China with its search engine, but Google may wind up effecting more change by closing it down.

They are perhaps the most repeated, misunderstood, and beloved three words to ever be associated with Google: "don't be evil." Those words, highlighted in the company's initial public offering in 2004, underscored how differently Google wants to be thought of compared with the average corporation.

This has always been a company with a moral pulse, one that in its early days attracted a certain sort of idealistic engineer who truly believed the world could be made a better place by a responsible corporation that efficiently spread information and technology around the world.

Yet Google is also one of America's largest and richest public companies, and obsessed with growing even larger. Operating on a global scale can require even the nicest businesses and companies to rub shoulders with governments that don't share the values of Silicon Valley.

The collision of those two forces led Google into what the company founders may eventually come to consider as its worst decision: to self-censor search results in China for almost four years in hopes of improving overall access to information. The company did an about-face Tuesday, declaring that unless the Chinese government allows it to offer an uncensored search engine inside of China, it will shut down its operations in the country.

Google originally justified its decision to censor results in 2006 as a way of helping the Chinese people. Simply offering Google.com from outside of China made the search engine subject to The Great Firewall of China and hurt performance but didn't require Google to police itself. Opening an office inside of China would require it to follow local laws regarding the dissemination of information on the Internet, but Google believed it could improve access to information in China just by being present with a fast and comprehensive search engine.

There was also a financial incentive, of course. China has the most Internet users in the world, with stunning growth over the past decade and much more in store, given that only 25 percent of the country is currently using the Internet.

But Google never seemed to be fully comfortable with its decision. Co-founder Sergey Brin told The Guardian in 2007 that Google's actions resulted in a "net negative," an engineer's way of saying that Google had lost more than it had gained in pursuing business opportunities in China.

Google lost the respect of many U.S. and European citizens, who were amazed at the way the company was able to justify compromising its lofty principles in the name of profit. It lost a little of its idealism in deciding that it had to work with a government that many consider one of the largest offenders of human rights on the planet in order to grow its business. And it lost the battle: Google had just 14.1 percent of the search market in China during November 2009, compared with Baidu's 62.2 percent, according to ComScore.

Saddled with a struggling business and a queasy stomach, Google now hopes to regain the moral high ground. It's extremely unlikely that the Chinese government will permit an uncensored search engine in China, especially after being so publicly implicated as the force behind the attacks on the accounts of Gmail users whose main offense was speaking out against that government (Google refused to point its finger directly at the Chinese government, but security researchers have linked the most recent attacks with previous attacks on U.S. companies believed to come from agents of that government).

And after playing defense throughout 2009 against governments and citizens concerned about its growing power, Google has now created a situation where privacy advocates and human-rights activists are applauding the company for taking a principled stand against the Chinese government.

Back in November, CNET asked Google CEO Eric Schmidt about the "don't be evil" credo and how it applied to Google now that the company has grown into such a large business. He said that "don't be evil" allows Google employees to stand up and play The Evil Card without repercussions, forcing a discussion about whether Google is choosing the right course of action during tricky decisions.

Without prompting, Schmidt brought up Google's decision to enter China as an example of how that process works. "Certainly, the China decision, which was very controversial at the time, but I think ultimately, the right one for us, is another example of a tortured internal discussion, which ultimately came to roughly, the right outcome," he said.

The discovery of cyberattacks originating from China against Google seems to have finally tipped that debate for Google. It's now clear that Google believes it erred in making the decision to get in bed with the Chinese government back in 2006, regardless of whether that revelation comes from business reasons or moral reasons.

Google has now put American Internet information companies doing business in China in a very difficult position: stay and appear to their home crowd to be agents of the Chinese government after Google's strong rebuke, or leave and miss out on the land grab that is the Chinese Internet market. And the end result of all this could be that the Chinese government emerges with even stronger control over the Internet if domestic firms with fewer reservations about censorship or surveillance take their place.

Google could have changed the way Internet companies work in China Tuesday. It once hoped for something much more.

By Tom Krazit
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