Friday, March 26, 2010

Google in China

Image:: Li Xing in The People's Daily, China

I don't think Google's feud with China is going to go well for the tech behemoth and it has everything to do with culture and the sociocultural concept of "face". Google is/was in a tough spot, as China was using their Great Firewall to censor content and there have been allegations by Google of snooping attacks looking for activists. Putting this on the Google blog probably wasn't the wisest thing to do while in the midst of their conflict with the government. Their reaction of redirecting searches to Google Hong Kong and adding Twitter feeds to searches {in defiance of the Chinese government} are willful acts of defiance. Strategically, I don't see how either of these things are helpful, particularly in light of the government taking a more assertive stance with foreign entities. In the wake of Google's decision to redirect searches, the Chinese government staked their position on the matter.

From an international business perspective, Google will have to go a long way to mend the fence and get back in China's good graces. Companies like Raytheon have been frozen out of China after going against the government. One analyst quoted in the Telegraph summed up the situation succinctly::
"We don't see this as reducing tension...We see this as increasing or ratcheting up tension between the two parties. You sort of make China look like the bad guy and you think you're going to be selling Google phones? Good luck, we'll see how that goes."
He also pointed out that the effects of this could be enduring. The company is now a radioactive pariah, as partners and allies are likely to drop them to be in compliance with Chinese laws. The capital markets are a bit nervous about Google's fortunes in light of their battle with China going on since January. While Google's revenues in weren't that sizeable, the potential market is huge.

I'm not privy to what was said between Google and the Chinese government over the past few months, so I'm not sure what drove Google to this point. Their actions seem reckless and borne out of frustration, exhibiting an extreme lacking of cultural savvy. While their actions may have worked in a Western context and with Western conventions of PR and public opinion, this just isn't how things are done in China.

Twitterversion:: Google playing hardball w/China, but is this a culture and international business #fail forcing the govt to lose "face"? @Prof_K

Song:: Bowie/Metheny-'This Is Not America'

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