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Updated Wednesday, January 27, 2010 10:17 am TWN, The China Post news staff

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Is Google's threat to quit China principle or posture?

Some see Google's move as a calculated attempt to shore up its base of loyal customers. Reuters news agency claims that Google's business in China represents only a tiny fraction — less than five percent — of the Internet giant's total annual revenue of anywhere from US$300-US$600 million. When most people in China search for something online they visit Baidu.com, China's leading search engine. Baidu has over 60% of the Chinese market cornered, and Google shares the rest with an assortment of other companies. Google executives may believe that if the majority of its customers — based in the U.S. and Europe — believe that the company is an enabler to mainland Chinese censorship or begin having worries about the safety of the Gmail service, they may take their business elsewhere. Adding weight to this view is the fact that Google itself was founded on the principle of freedom of information. Google's mission statement claims the company exists “to organize the world's information and make it universally accessible and useful.” Google's informal corporate slogan is “Don't be evil.” This simple slogan was suggested by early Google employees as a reminder to the company to never fall victim to the urge to maximize short-term profits with actions that destroy the value of the brand and interfere with its stated mission.

Perhaps the prospect of Google being put in the same position as Yahoo has caused some at Google headquarters to think twice about continuing in the Chinese market. Many will remember that in 2006, a Chinese dissident was jailed after Yahoo — under direct orders from authorities — handed over e-mail records that led to an arrest. The company was widely condemned, and although Yahoo attempted to placate critics by claiming they were just following Chinese law, the knowledge that Yahoo was indirectly responsible for the fact that a prisoner of conscience now sits in a Chinese prison cell left an indelible black spot on Yahoo in the minds of many Internet users. Close to 150 million people use the Google Gmail service and perhaps the company feels any splotches on its record are too big a risk to take.

The world will have to wait to see how this game plays out. Either China will take the isolationist route and say good riddance, or some sort of face-saving compromise will be enacted. As China tries to turn away from its hard-line image and promote what it calls its “peaceful rise,” it's hard to know who needs who more. Does China need Google in order to maintain at least a facade of internationalism and openness? Or does Google need the potentially massive revenue of the Chinese market enough to compromise on some of its basic principles? It's possible that many a multinational company will have to think about such issues while doing business in China in the years ahead.

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