Google's Dicey Dance in China

Its decision to place search servers on the mainland should bolster profits. But will bowing to Chinese censors spark a backlash?

The collision was inevitable. Google (GOOG), the world's leading search engine, has vowed to provide "unbiased, accurate, and free access to information" to people around the world, while touting a corporate motto of "don't be evil." And China, which controls information with an iron grip, has blossomed into the world's second-biggest and fastest-growing Internet market.

For those wondering what would happen when the irresistible force of Google and its altruistic motives finally met up with the immovable object of China, with its lure of higher profit, the answer came on Jan. 24. Google unveiled its first search service inside China ( Its concession: Google will play by government rules and censor results of sensitive queries, such as "Falun Gong" or "multiparty elections."


  The appeal of bolstering search capabilities in China is clear: Google gets a leg up in a hotly contested market. It's currently the No. 2 search provider inside China, behind local outfit (BIDU). Google already has a Chinese-language site that's hosted outside of China and not censored by the company, though government censors have hampered access to it from within the People's Republic.

But now, Google will move its search infrastructure, such as the servers that fire up lists of results, inside China. That will let it produce faster results, as well as cement ties with local advertisers eager to have their wares promoted alongside searches.

It's a move that Wall Street will likely laud. But censoring results could open Google to criticism from users and human-rights advocates. That's why its execs have pondered their China strategy for a couple of years now, moving into the country well after competitors Yahoo! (YHOO) and Microsoft's (MSFT) MSN.

"While removing search results is inconsistent with Google's mission, providing no information -- or a heavily degraded user experience that amounts to no information -- is more inconsistent with our mission," says Andrew McLaughlin, senior policy counsel at Google.


  To its credit, Google plans to be up-front with users. Company officials say they'll place a disclosure on all pages where search results have been filtered out. Google makes similar disclosures on its non-Chinese sites, whether results are removed for copyright reasons or other local laws. Other search engines aren't providing such notification inside China at this time.

In addition, Google has opted to limit its China launch to search-related services, including images, news, and local search. It has no plans to set up blogging or e-mail services, which are heavily controlled in China (see BW Online, 1/12/06, "The Great Firewall of China"). "Other products -- such as Gmail and Blogger -- will be introduced only when we are comfortable that we can do so in a way that strikes a proper balance among our commitments to satisfy users' interests, expand access to information, and respond to local conditions," says McLaughlin.

Such offerings have put other U.S. companies in very troubling positions in the past. Yahoo was pushed last year to give Chinese authorities information on e-mail user Shi Tao. Ultimately, Shi Tao received a 10-year prison sentence. His crime: sending e-mail to a human-rights organization in the U.S. that summarized a government memo about its concerns regarding the anniversary of the Tiananmen Square protests. And Microsoft complied with a request by Chinese authorities in December to remove a blogger who was deemed overly critical of the government.


  By not situating its e-mail or blogging products inside China, Google could spare itself complicity in such requests. That's a smart move, say some experts. "This puts [Google] on a slightly different level than Yahoo in particular," says Tim Wu, professor of law at Columbia University. "[Google] won't be put in a compromising situation where [it's] actually providing information that puts someone in jail."

But the search giant likely won't strike as active a defense against government requests as it has in the U.S., where Google is resisting a government subpoena for search data that has been sought to inform legislation on Internet pornography. All of its main competitors complied with the request. While Google has received some accolades from privacy watchdogs, it won't have the same legal avenues to fight such requests inside China (see BW Online, 1/23/06, "Testing China's Web Tolerance").

This may rankle some China-based fans of Google's service. "It's obvious there's a double standard," says Ye Ling, a 32-year-old entrepreneur and Google user who operates a Beijing podcasting and video-blogging startup, WangYou Media. "[Google is] doing everything that the Chinese government requests [it] to do."


  This reality could influence where Google stores search data. If heaps of this info are stored on machines located outside of China's borders, they may fall beyond the tentacles of China's authorities. "We're going to be very conscious of where this data is located," says McLaughlin. Google hasn't said, however, where the data would be stored.

Despite its thoughtful stance, Google in the coming weeks will be hard-pressed to reconcile its China thrust with its long-standing mission to organize the world's information. For many, the answers could prove difficult to digest.