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Tuesday, January 12, 2010

Google Considers Pulling Out of China Four Years After Grand Entrance

Google is reporting through its Chief Legal Officer David Drummond that it's ending the censored version of its site in China, and considering pulling out of the country.

This is a gripping development.

Google's so big, they almost face the same dilemmas as a country trying to trade with China -- almost.

Summing up, purists argued that Google shouldn't go in in the first place, and certainly in our response in January 2006, we felt Google was being naive, but agreed that there was complexity in trying to initiate political change by being open to a partner that was far from perfect. We added that if it didn't pan out, they could leave. We figured they could set a time limit, then leave if the human rights situation didn't improve.

Six months after that, Sergey Brin was already expressing misgivings, and no doubt the company has been thinking about the relationship ever since.

Although the current shift in policy seems to be triggered by episodes of Chinese government hacking and espionage to spy on human rights advocates, no one episode need to explain the desire to pull out; certainly it doesn't seem like this is the only issue at hand.

Indeed, the US government has been alarmed at widespread security breaches of the Pentagon and other federal institutions dating back to at least 2007, clearly traceable to China. The early denials by China have given way to regular confirmations from well-placed security experts.

Google, as a private company, turns out to have the luxury of pulling out of a country if it doesn't like their policies. They can even chalk it up to "regulations" that make it "hard to do business," if they wish.

So, Google isn't a nation-state just yet. While there will be forgone revenue, the repercussions are likely to be relatively mild, and Google answers to its shareholders, stakeholders, and customers.

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Posted by Andrew Goodman




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