Google's Chinese Wall

The search outfit boasts of making all the information in the world just a click away. These days that doesn't seem to apply in China

By Ben Elgin

When Google went public earlier this year, its founders vowed the 6-year-old company would put its ideals above the financial pressures of Wall Street. Although the jury is still out, it appears that pledge could be a very difficult one to keep.

Shortly after the Sept. 9 launch of Google's (GOOG ) site for searching Chinese news outlets, it was revealed that the search kingpin is voluntarily excluding several sites banned by China's Internet censors. However, Google makes these same news sources available to viewers who access its Chinese news site from beyond China's borders. Such self-censorship stands in stark contrast to the Google of two years ago. When the Chinese government briefly banned Google's search service in late 2002, it refused to alter results, bolstering the search engine's reputation for integrity.


  Although Google admits to removing eight news sources from its Chinese news site, the company insists profits were not the motive. "In order to create the best possible search experience for our mainland China users, we will not include sites whose content is not accessible," says a Google spokesperson. The fact that China is poised to become the world's most populous Internet market, and one of the most lucrative, played no role in the decision, the company insists.

That's a tough argument for many to swallow. For starters, Google's technique of offering duplicates, or so-called cached versions of sites, often serves as a work-around to accessing sites filtered by government censors. Although it continues to offer this feature with its main Chinese search site, it doesn't store duplicates for its news site. Google says it doesn't cache sites for any of its regional news sites, arguing that it is only being consistent across its various geographies.

But the consistency argument is shaky. In the case of its Chinese news site, Google is taking the extra technical step of sniffing out a visitor's location -- something it doesn't do with other regional news sites, according to a Google spokesperson. If Google is going to veer from its formula, why do so in a spirit that runs against its credo of organizing all of the world's information? "Google is bowing down [on this issue], likely for moves they would want to make into China down the road," says Janco Partners analyst Martin Pyykkonen.


  Just as disturbing for many is the lack of disclosure around removed content. In the U.S., for instance, Google is occasionally required to remove content deemed protected by the Digital Millennium Copyright Act. But instead of simply erasing this content from existence, Google still notifies searchers that certain additional content would have appeared. That's not the case in China, where Google doesn't give users a glimpse of the headlines they are missing, let alone disclose that the site has been modified.

"It would be more helpful to be very open with what you're doing, how, and why," says Jonathan Zittrain, assistant law professor at Harvard and founder of the Berkman Center for Internet and Society. "It's terrible to not know what you don't know."

True, Google's main Chinese search service still presents results that appear to be unfiltered, according to watchdogs. Key competitor Yahoo! (YHOO ), meanwhile, has long conformed to censors' edicts in its own Chinese site. Another thing to consider: Google's Chinese news site is still in a test-launch period, meaning further changes could be applied.


  There is no question that Google's efforts to foster at least a lukewarm relationship with Beijing will be important. At the end of 2003, China had some 80 million Internet users, the world's second-highest national tally, according to research by Morgan Stanley (MWD ). That compares to 185 million Internet users in the U.S. But with China's Internet penetration at a meager 6% of its population, as opposed to at least 60% in the U.S., China could become the world's most populous Internet market within five years, according to Morgan Stanley.

Sacrificing too much carries the danger of a backlash. More than any other Internet company, Google relies on its gilded brand to keep visitors coming back. A recent study by researcher Vividence found that the actual quality of search results returned by Google isn't significantly different from its competitors. Despite the parity of the results, however, 90% of Google users said they had a "strongly positive" search experience, vs. 68% for Yahoo and 41% for Microsoft's (MSFT ) MSN.

This halo effect is created not only by Google's sleek interface and its clear marking of ads, but also by its hard-won reputation for integrity and fairness. Google must be careful. If it begins blurring its customer-centric view for the sake of business opportunities, its brand could start to erode.

Elgin is a San Mateo, Calif.-based correspondent for BusinessWeek

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