Saturday, April 10, 2010

China bad for Google, good for Microsoft

China's demanding internet censorship regime has forced Google to shut its search services in China. At least, this is what Google would like us to believe.

Then how is it that the same censorship rules are good enough for Microsoft, Yahoo and other internet companies which are still bullish on China. Within days after Google shut their search services on China site, Microsoft announced an expansion plan for its own search service Bing. Bing unsuccessfully competes with Google for market share in the search business. Google's absence in China can be an opportunity for Microsoft to inch up Bing's market share.

Google wanted Microsoft and other US internet companies to rally behind the exit decision to increase pressure on China. But that has not happened. Now Google is accusing Microsoft and others of putting profit before everything else.

Indeed, Microsoft has openly said they would continue to do business with China and obey the local laws.

Google and Microsoft both are founding members of Global Network Initiative, a non-profit grouping to encourage technology companies to adopt human rights and privacy rights policies. Their opposing stand on China is a bad news for the GNI and raises questions about its future.

Google had said that "Google and more than twenty other U.S. companies had been the victims of a sophisticated cyber attack originating from China, and that during our investigation into these attacks we had uncovered evidence to suggest that the Gmail accounts of dozens of human rights activists connected with China were being routinely accessed by third parties."

None of the other US 20 companies has spoken up. They quitely continue to do business with the Chinese. Do they have human rights policies?

China is a lucrative market. Companies would not like to jeopardise their prospects in China by criticising the government policies or by championing human rights. That does not make business sense. They won't change this approach unless their more enlightened customers in the US and Europe punish them for their China actions.

Another possibility is that the US lawmakers may use the Google saga to introduce a bill that will seek to prevent technology companies from doing business in China if China does not rationalise its human rights and privacy policies.

For now Google is alone in its fight for privacy of users. But, is that the real story? Everyone knows that even after years of trying hard, Google was not able to beat Baidu, China's local search giant. China is the only market where Google is not number one. Observers say that Google's decision to leave China has more to do with its failure to win market share rather than privacy and human rights concerns. Is it a case of grapes are sour?

See here Google's official position on their exit from China.

No comments: