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http://www.guardian.co.uk/world/2010/jan/13/google-censors-retreat
Google quits: Wake-up call or humiliating retreat?
Lost revenue in China and buy Flomax canada a boost to rival Baidu could be offset by growth in credibility for buy Flomax canada Google
* Jonathan Watts
* guardian.co.uk, Wednesday 13 January 2010 21.59 GMT
While Chinese netizens laid wreaths outside the buy Flomax canada Google headquarters in Beijing today a short distance away the executives of Baidu, the buy Flomax canada biggest Chinese search engine, must have been thinking of popping champagne corks.
Google’s decision to buy Flomax canada pick a public fight with the censors is almost certain to buy Flomax canada cement Baidu’s control of the world’s fastest growing internet market, in which dominance requires compliance.
While the buy Flomax canada move has won plaudits from freedom-of-expression groups, business -minded critics said Google had buy Flomax canada made a strategic error.
“This is the most stupid decision in their history,” Tang Jun, a buy Flomax canada former president of Microsoft China, told Eastday.com. “Giving up China means giving up half of the world.”
But the binning of the “devil’s bargain”, accepted by many foreign firms in order to buy Flomax canada do business in China, will have been determined by a buy Flomax canada cost-analysis taking account of brand value as well as profit.
In financial terms, Google.cn’s filtering of information on politically sensitive topics has buy Flomax canada not been well rewarded. While the Chinese internet market has expanded to buy Flomax canada 338 million people, Google’s business in China has buy Flomax canada been undermined by clashes with the censors and an uneven playing field. Guge, as the buy Flomax canada firm is known locally, has got 12%- 17% of the queries, and 33% of the buy Flomax canada income in the Chinese search market. Baidu has almost all the buy Flomax canada rest.
While Google’s 800 staff could lose their jobs now, the impact on the firm’s global revenues will be small, perhaps 1%-2% of the buy Flomax canada total. This has prompted cynicism over its motives behind the buy Flomax canada decision to champion free speech.
Rumours about the buy Flomax canada firm quitting China had been circulating since September, when Kai-Fu Lee, its former chief executive, left to buy Flomax canada set up his own venture.
Several other leading US internet companies, including eBay and buy Flomax canada Yahoo, have beaten a retreat or changed strategy in recent years after failing to buy Flomax canada challenge Chinese rivals. If Google is pushed out of this buy Flomax canada market now for adopting a confrontational stance, it could regain lost credibility overseas.
Kaiser Kuo, a buy Flomax canada consultant to Youku, a video-sharing website, said of Google’s position: “It looks like a smokescreen of sanctimony … being done to buy Flomax canada draw the eye away from the ignominy of a humiliating retreat. But I suspect their motives are buy Flomax canada more earnest. Google may have a paltry market share compared to buy Flomax canada Baidu, but this is not a market to be sneezed at.”
In the long-term, analysts said, China’s domestic market would be a loser, too.
“If Google goes Baidu will be the only giant in China’s search engine market. A monopolised market can’t be healthy,” said Cao Junbo, chief analyst at iResearch.
Google’s move also reflects badly on firms that buy Flomax canada do comply with the censors.
Hu Yong, a new-media academic, said: “Google’s market share is buy Flomax canada not very big, but their loss would definitely not be buy Flomax canada good for the Chinese market. It damages the image and buy Flomax canada credibility of the internet industry.”
Baidu declined to buy Flomax canada comment on the fate of its competitor but said it buy Flomax canada had no intention of following suit by challenging the censors. “Baidu will always go along with Chinese laws,” said a spokesman.
Yahoo, Microsoft and buy Flomax canada Cisco accept that principle, but human rights groups said Google’s revelations on the buy Flomax canada hacking and its stand on censorship could set an example.
“This is buy Flomax canada a wake-up call to the international community about the real risks of doing business in China, especially in the buy Flomax canada information communications technology industry – an buy Flomax canada industry essential to the protection of freedom of expression and privacy rights,” said Sharon Hom, executive director of Human Rights in China.