Interesting announcement by Google that they plan to pull out of China if the government can’t curb the hacking of email accounts on it’s free service offering, Gmail. It appears that there is a lot of activity with human right activist’s email accounts specifically, being compromised.
Being in the communist state has always gone against the grain for Google but with the promise of increased advertising revenues (for a business with a motto of ‘don’t do evil’) they were very happy to restrict content for Chinese users. However as time has gone on revenues haven’t increased and many believe China is still a loss leader for Google.
So the best way to gain more market share? To publically humiliate the Chinese government and get more column inches in every paper globally than any marketing campaign could achieve. I am sure Google couldn’t give to hoots about the compromised email accounts, but by voicing it’s concern publically not only wins public support but also dramatically increases advertising revenue as people flock to the website.
Don’t get me wrong, I am not advocating China’s way of doing business, but to suggest Google is taking a stand for human rights and not commercial gain is short sighted. I wouldn’t be surprised if more western businesses join the bandwagon as China beating becomes more popular. It is a communist state with appalling human rights abuses – what do they expect?
I presume you are talking about international market share rather than Chinese market share?
Because they will shortly be completely blocked in China so their market share will drop to 0% (from 10-30% depending on who’s figures you believe).
Internationally, I doubt all this coverage really has much effect on Google’s market share given the ubiquity of this brand.
Yes I did mean international but it is a good point. I just think with a business so reliant on publicity for revenues Google’s statement is misplaced and there to increase it’s global presence. It would mean more if someone like Microsoft made the statement because you would know that they would only be loosing revenue in coming out of China as their revenues globally rely on product and not advertising.
I agree Piers that people are hastily jumping on the ‘bash China’s human rights record’ bandwagon. Especially corporations. It’s interesting to see that hacking into Gmail accounts actually did the hackers little good – they could only view the subject lines of the emails, and even then, only a few accounts (we’re talking double digits here) were compromised.
I think Google’s public outrage and refusal to do business in China is for two main reasons:
1) As you say, the business was a loss leader. They want to back out of the market whilst regaining their “do no evil” USP in a very public way. Little is said that Google were quite happy to drop that core business motto for the last four years, when they set up shop in China in 2006
2) Their hysteria over the hacked accounts (again you’re right – they couldn’t give a bollocks), is synonymous with a growing corporate fear (especially amongst the global Fortune 100 companies) of the sheer scale and ruthlessness of attacks coming out of China. China is the first nation-state to employ cyber crime in such a way (the Russians dabble), and that’s making the international community scared. I think Google have the backing of the West when they make this a very public issue, to try and embarrass the Chinese state into abating attacks (until such time of course that they can get their systems properly secure).
In my opinion, everyone is stalling for time, and governments are trying to pull the wool over tax-payers eyes before they realise the potential cyber threat that we face, and how woefully under-prepared we are to face it.