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Summary:

Google says its search services have been partially blocked in China, as it waits for a decision on whether its licence to operate there will be renewed or not. The company has now tried several times to find a way of remaining in China while still refusing to filter its search results. All of which raises an obvious question: Why doesn’t Google just leave China altogether?

In the latest move in Google’s ongoing dance with Chinese authorities, the company says its search services have been partially blocked, as it waits for a decision on whether its licence to operate in China will be renewed or not (the deadline for renewal, which Google and other Internet service providers must do annually, was Wednesday). The search giant has now tried several times to find a way of remaining in China while still refusing to filter its search results as the Chinese government demands. All of which raises an obvious question: Why doesn’t Google just close up shop and leave China altogether?

To recap, Google started the current fight with the Chinese government in January, when it announced that it would no longer filter its search results in that country, in part because of a hacking attempt that Google suggested was related to government attempts to track and monitor dissidents in China. In March, the company started redirecting searches from its Chinese website automatically to the Hong Kong version of its site, which isn’t subject to government filtering restrictions. Earlier this week, however, Google said the Chinese government complained about this practice, and threatened to withhold its licence to operate in China.

Google was criticized by some when it chose to defy Chinese government demands and stop filtering its results — skeptics argued that the company’s search market share was so low in China anyway (it has an estimated 30 percent of the market, compared with local provider Baidu’s 65 percent or more) that it was using this ethical stance as a cover for its withdrawal from the Chinese market. But others applauded Google for taking a principled stand against the government’s repressive tactics. So if the company was actually acting on principles rather than out of expediency, as co-founder Sergey Brin has described, then why not take that stance to its logical conclusion and simply exit the country?

Even if Google were to shut down its Chinese site and services, most Chinese users would still be able to use the standard .com version of the company’s site, although those results would in most cases be filtered and the government could block access to the site altogether if it wanted to. Chinese users could also go to the Hong Kong version of the site directly, or the Taiwan version, although the Chinese government could also take action to block those too if it wished. But fundamentally not much would change from a search perspective, especially since Google seems to be hamstrung in China currently anyway.

What Google would lose, however, is a brand presence within China, and the ability to market both search and other services and features to Chinese residents who aren’t already users of the site. Obviously, losing access to a nation with more than a billion citizens, many of whom are becoming more affluent and looking to do more online — particularly in the mobile space — would be a severe blow. And it’s clear from the machinations it has been going through that Google would rather cling to the Chinese market by its fingernails than give up access altogether.

But at least if it left China, the company would be able to say that it stood firm in the face of demands from a totalitarian regime, and that has got to be worth something. Whether it is worth the loss of a potential billion-plus customers is something only Google can decide.

Related content from GigaOM Pro (sub req’d): As Cloud Computing Goes International, Whose Laws Matter?

Post and thumbnail photos courtesy of Flickr user Steve Webel

  1. If Google were to leave China, or be kicked out, how would that likely affect other countries’ users of Gmail, Apps and Android devices when they visit China?

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    1. I’m not sure, Paul — my understanding is that when in China, users of those services would have to go through the Great Firewall, so would be subject to whatever blocking or filtering or monitoring the government chose to impose. If anyone knows the specifics, I’d be interested in hearing about it.

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      1. It would put a big hurt on Apps – doc sharing is less fun when 20% of potential sharers (and maybe half your potential business partners) can’t play.

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  2. “but at least if it left China, the company would be able to say that it stood firm in the face of demands from a totalitarian regime, and that has got to be worth something.”

    Good sentiment. But businesses don’t operate that way, they are looking at the bottom line, which is a potential loss of a billion customers and worse someone else wedging in Google’s place. Tough call but it is worth continuing the dance!

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  3. Who knows google’s thinking when opting to take on China.

    But as a Citizen that wants companies like Google to have a conscious when adopting policy, my reaction is clear:

    Support Google!! Give them a cheer, and an extra share of your buisness! If you are a skeptic that Google’s motives are selfishly motivated, then support them double, since you know that it was your support that they were motivated by anyway.

    It does not matter WHY, it matters WHAT. and in this case the “what” is a great precedent that I for one would like to see, followed by many other selfish businesses.

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  4. Artruro Jayson Thursday, July 1, 2010

    Despite this being a pit bull attacking a kennel of attack dogs, if either side were taken I’d have to support the one that’s been giving me my daily YouTube these past few years. As China works to encrust the world in more of this Chinese thought, we’ll all just have to sit back and watch it screw into its own potential, yet unlikely, prospects. Even totalitarian living has to unwind itself now and then.

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  5. [...] as Google’s ongoing standoff with Chinese authorities has demonstrated, doing business in China can be a labyrinthine task. Guzy’s top recommendation [...]

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  6. Why didn’t they just leave? maybe they actually care about their Chinese users? I know I know, they’re not the only internet company operating in China, but changing your primary email is a pain in the ass. Baidu is useless in search for english content (btw, they’re better than Google in Chinese search is a myth, they’re not, and baidu’s portal is infested with virus). Not everything has to be about PR, this is one PR campaign they didn’t need to start at all.

    The Chinese government don’t want to be appear hostile to foreign companies (especially this has become so high profile) and is seeking a legal excuse to kick out Google, therefore Google is flinching left and right, legally.

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  7. Google is all talk and no trousers.

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