Google In China Case Study 2010 Winter

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  • Google has revealed that the Gmail accounts of Chinese human rights activists were targeted last December in a hacking attempt. That, along with other issues, has convinced the company that it will no longer censor results China as the Chinese government wishes.

    In particular, Google has willingly allowed self-censored its search results since January 27, 2006, on its Google China service. The screenshot above show an example of this, where a search for tiananmen on Google China (on the left) doesn’t bring up protest pictures as you get when searching for the same thing on Google’s main site at Google.com.

    Google was heavily criticized for caving into China, especially in light of its “Don’t Be Evil” motto. Google CEO Eric Schmidt at one point explained that Google developed an evil scale to weigh if it was better to be a little evil in censoring for the bigger good in bringing information to the Chinese people.

    That scale has now tipped so much that Google’s effectively pulling out entirely of censorship. As it has investigated attacks on its Gmail service, Google has decided cooperating on censorship makes no sense. I’ve bolded the key part from today’s blog post:

    We launched Google.cn in January 2006 in the belief that the benefits of increased access to information for people in China and a more open Internet outweighed our discomfort in agreeing to censor some results. At the time we made clear that “we will carefully monitor conditions in China, including new laws and other restrictions on our services. If we determine that we are unable to achieve the objectives outlined we will not hesitate to reconsider our approach to China.”

    These attacks and the surveillance they have uncovered–combined with the attempts over the past year to further limit free speech on the web–have led us to conclude that we should review the feasibility of our business operations in China. We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China.

    The decision to review our business operations in China has been incredibly hard, and we know that it will have potentially far-reaching consequences. We want to make clear that this move was driven by our executives in the United States, without the knowledge or involvement of our employees in China who have worked incredibly hard to make Google.cn the success it is today. We are committed to working responsibly to resolve the very difficult issues raised.

    What was the attack that triggered all this? Google says that in mid-December, it detected an attack from China on its “corporate infrastructure” that resulted in the theft of “intellectual property” from Google. Exactly what intellectual property was stolen wasn’t disclosed, but it seemed to involve trying to access the Gmail accounts of some Chinese human rights activists. Google says no actual emails were recovered, however:

    We have evidence to suggest that a primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists. Based on our investigation to date we believe their attack did not achieve that objective. Only two Gmail accounts appear to have been accessed, and that activity was limited to account information (such as the date the account was created) and subject line, rather than the content of emails themselves.

    Google also said that it was not the only company to have been attacked in this way:

    As part of our investigation we have discovered that at least twenty other large companies from a wide range of businesses–including the Internet, finance, technology, media and chemical sectors–have been similarly targeted. We are currently in the process of notifying those companies, and we are also working with the relevant U.S. authorities.

    Also as part of its investigation, Google says it has also determined that Gmail accounts of some activists HAVE been accessed but not because of a Google security breach but instead do to activists being victims of malware or phishing attempts:

    As part of this investigation but independent of the attack on Google, we have discovered that the accounts of dozens of US-, China- and Europe-based Gmail users who are advocates of human rights in China appear to have been routinely accessed by third parties. These accounts have not been accessed through any security breach at Google, but most likely via phishing scams or malware placed on the users’ computers

    Google does not explicitly say that the Chinese government itself was behind or condoning the attacks, nor could I get them to confirm this in talking about the move. But that’s the implication. It makes little sense to tell the Chinese government that you’ll no longer cooperate with it on censorship because of hacking attempts unless you believe those had government approval.

    Google & Censorship

    To understand more about how Google has censored in China, I highly recommend reading Google’s Gatekeepers, a New York Times Magazine article from 2008 that looked in depth at the issue. On the 20th anniversary of the Tiananmen Square protests, Google also blocked all searches for those words, not just particular content that the Chinese government might have deemed illegal. Google also applies censorship to the sources it carries in the Chinese version of Google News.

    The censorship is not perfect. For example in a search for tiananmen square, I got images of injured people on Google China (the first and fourth images below, reading from left to right):

    Of course, if I were actually within China, the images that I see above might have been better filtered. It’s also confusing to know what anyone sees exactly, since Google shifted to personalizing results for each individual back in December.

    China is also not the only country where Google censors. Google also censors in many other countries, including Germany and the US, depending on national laws.

    For example, in a search for american nazi party on Google Germany, you can see that Google has censored one result as indicated by the disclaimer it shows at the bottom of the page:

    Similarly in a search for Addicted To Bass Winter 2009 download on Google in the US, six pages have been removed because of a copyright infringement claim:

    In China, disclaimers are also posted when content is removed, as you see here:

    So one issue Google now faces is why it will now fight Chinese censorship but not censorship in other countries. The answer is likely that Google will seek to curb the widespread censorship that China demands especially on political discourse. That broad censorship, even though legal in China, may not be deemed as too restrictive and unreasonable for Google to operate under.

    Google & The Chinese Market

    Google has diligently worked to build marketshare in China over the years, one of the few countries where Google is not the dominant search player. When Google initially failed to censor, it found itself losing traffic due to government blocking. The current leader, Baidu, gained from this. The ability for people to find music, not always legally, on Baidu also has contributed to its growth.

    In another example of its efforts in China, Google underwent a huge fight with Microsoft to retain Kai-Fu Lee as president of its China operations. Lee was formerly a Microsoft employee. In 2008, Lee said his goal was to make Google the Chinese market leader in five years. Google won the fight for Lee, though he eventually left the company late last year.

    Postscript: I sent across some further questions to Google, and here’s what I’ve received from the company:

    Can you say more by what you mean about intellectual property? Are you talking about some of the code that runs Gmail or what?

    This is the subject of an ongoing investigation, and we simply cannot comment on the details.

    It sounds like you’re saying the Chinese government was behind this. Is that the case?

    We’re not going to speculate, because we don’t know. What’s clear is that the environment in which we are operating in terms of an open Internet is not improving in China. That, combined with these attacks and the surveillance they have uncovered, mean that we’re no longer comfortable self-censoring our search in China.

    Is the censorship ended as of 3pm Pacific, or is there a phase out?

    Via the blog post [we’ve said]: We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all.

    That suggests that censorship is continuing for the time being and may do so over the coming weeks.

    Postscript 2: There’s building related coverage of the news here on Techmeme. now. I’d also recommend watching long-time China watcher Rebecca MacKinnon’s blog for her take, which I expect will appear in the near future.

    Postscript 3: I’ve been talking with people on Twitter, along with some journalists who’ve called me, about the whole “Is Google doing this because it’s losing in China” thing.

    No, I don’t think that’s the case at all. I think it’s a reasonable question to ask, of course. When Google first started censoring, the company’s stance was that primarily, they thought being in China overall was a good thing for the Chinese people and secondarily, it was a good business move for Google. I think people at Google convinced themselves to believe that, even though the primarily move in my mind is that they did censoring for business reasons.

    Here we are three years later. Google’s losing, so it wants to get out, and this is a good excuse? Google’s still got a pretty solid share, depending on what numbers you want to look at. From Fortune, from the third quarter of last year, Baidu was by far the leader, with 77%. But Google had about 17% of the market — well behind, but almost double what Bing has in the US market. It’s a healthy percentage.

    Moreover, as I often warn when it comes to marketshare percentages, you also have to look at search volume. It’s possible for a company to have its search percentage decline but the number of actual searches it handles go up. That’s because the overall search “pie” itself gets larger. A smaller slice of a bigger pie can be bigger than a big slice of a small pie. And if you look at this PC World article for about the second quarter of last year, Google’s search volume was up.

    Marketshare numbers in the US are also incredibly slippery creatures. Some ratings services don’t count things like “local” results. Some of them count a search refinement as a “new” search even though effectively, the same search session is happening. These same complication likely apply to estimates of the Chinese market. And what’s the revenue per search? In September, Forbes had a chart showing that Google’s revenue in China has risen in the past few months while Baidu’s had dropped.

    Don’t get me wrong. Baidu is the Google of China, in terms of being dominant. Baidu seems as much a habit to Chinese searchers as Google is for searchers in other countries — and it’s tough for any challenger to break a search habit.

    But are things really so dire for Google that it suddenly and abruptly threw in the towel today? Over at TechCrunch, Sarah Lacy talks about speaking with former Google China head Kai Fu Lee and his sense that Google couldn’t win as supporting evidence that today’s move was all about business:

    When I met with Google’s former head of China Kai-fu Lee in Beijing last October, he noted that one reason he left Google was that it was clear the company was never going to substantially increase its market share or beat Baidu. Google has clearly decided doing business in China isn’t worth it, and are turning what would be a negative into a marketing positive for its business in the rest of the world.

    It’s important to look at the two sentences separately, which is why I’ve italicized the second one.

    Let’s take the first. I’ve never spoken to Kai-Fu Lee, nor do I know him well. I do know Google fought hard to bring him in to China and after doing so, it didn’t grow. Was that because Lee himself wasn’t able to do it? Because Google itself simply can’t do it, because of the Baidu habit? Because of a variety of reasons out there? I don’t know. I do know that all this statement tells me is that Lee himself didn’t believe he could get Google into a winning position and decided he didn’t want to be leading a number two entry — not that Google was necessarily doomed to be a weak number two.

    That leads to the second sentence. It’s easy to read that as if Lee himself is saying Google decided that doing business in China wasn’t worth it. It’s not. That’s Sarah Lacy making that statement — her opinion. Perhaps correct, perhaps not (just as my own opinion on this might be right or might be wrong). But it’s very important that it not be read as Lee himself saying he left because he thought Google had given up.

    As I said on Twitter, Sarah seems far more a China watcher than I am. I’ve never even been to the country. So maybe she’s got a good read of the situation about Google’s prospects. Nor do I disagree that Google had a huge challenge ahead of it and potentially might not ever beat Baidu.

    But seriously, this is how it gives up? I think you have to be really, really cynical to choose this as among all the reasons for it pulling out in the way it did. You have to assume Google decided this would somehow cloak its China failure (and if that was the case, it’s only highlighting it to some). Potentially, Google might have thought this was a good way to put pressure on the other challengers in China — Bing and Yahoo — to pull out. After all, they’ve been under political pressure here in the US to stop doing it. That pressure will probably grow.

    While I’m not a China watcher, I am a long-time Google watcher. As I look at how the company has reacted, though the prism of my knowledge of what Google does and why it does things, this is personal.

    Look, it was incredibly disappointing when Google agreed to censor in China. I felt if Google couldn’t stand up to those demands, with its “Don’t Be Evil” motto, who would? And before I roll out the big bravo in the way that the EFF did today, I’m waiting to see that the censorship has really stopped with solid confirmation of it. Even then, glad that I’ll be for it to stop, it’ll still be tinged with disappointment that Google did it in the first place.

    But what really made Google “get” that censoring in China was wrong, when so many said this three years ago? I think it’s because this time, Google’s “kids” were attacked.

    Google is an engineering culture. The engineer rules over everything. And for these engineers, their creations are like children.

    The Chinese hacking attacks that Google alleges are like an attack on those children. It’s a line that I think Google simply would not allow to be crossed. I think Google is reacting in the harsh way it did today because it feels like a mother who just watched some bully pick on their child. She’s going to pull the child close and say to the attacker, “Only over my dead body. Do what you want to me. You leave my child alone.”

    And that’s what Google did today. Sure, Google says it hopes that it can find a solution with the Chinese government. But ultimately, it has had enough and simply doesn’t give a damn. It’s also a big enough company with plenty of revenue from other sources to be able to walk away — not to mention that it is ultimately controlled by two founders with a stock structure that means they can ignore whatever the markets might think, if they really want.

    Postscript 4: The Wall Street Journal has a piece saying the decision was “hotly” debated among Google execs. CEO Eric Schmidt was worried about a possible backlash (from whom, the Chinese government? Google investors? That’s not said). Google cofounder Sergey Brin is suggested as a driving force for pulling out.

    Brin was vocal shortly after the decision was made in 2006 that he felt Google had compromised its principles and made many wonder if the company would change its mind back then. Last January, Brin again expressed misgivings, calling the decision to censor a business “net negative.”

    Meanwhile, via Rebecca MacKinnon, a picture of Chinese leaving flowers at Google’s headquarters in Beijing, I assume in support of the company’s move.

    Postscript 5: Microsoft sends me this:

    We have no indication that any of our mail properties has been compromised.

    I also asked if Microsoft would cease censoring results on Bing China (the company has an incredibly tiny share of the market using this). I didn’t get a response on that. Microsoft recently came under fire when it was found that the regular version of Bing hosted outside China and aimed at anyone in general appeared to have Chinese censoring going on. The company responded that this was a bug.

    This is a good point to note that Google does not censor on its main site, Google.com. Chinese have been able to get uncensored results from that site even after Google agreed to censor on its Chinese site. The challenge has been that they would find that clicking on links at Google.com often would not work because of Chinese blocking. Sometimes, people can get redirected to Baidu.

    Yahoo sent me this:

    Yahoo! is committed to protecting human rights and takes our users’ privacy and security very seriously. We condemn any attempts to infiltrate company networks to obtain user information.  We stand aligned with Google that these kinds of attacks are deeply disturbing and strongly believe that the violation of user privacy is something that we as internet pioneers must all oppose.  Yahoo! sold its China business in 2005, and while maintaining a financial investment, we no longer have operational control over the Yahoo! China business. Yahoo! is committed to protecting our users’ rights to freedom of expression and privacy.  You can learn more about our human rights efforts here: http://humanrights.yahoo.com.

    You had also asked if Yahoo! was attacked.

    Yahoo does not disclose that type of information, but we take security very seriously and we take appropriate action in the event of any kind of breach. If you need to, please also feel free to attribute that to a Yahoo! spokesperson.

    Postscript 6: Microsoft has sent me this further statement:

    We are aware of the situation involving attacks against the corporate networks of Google and a number of other companies.  At this point, we don’t have any indication that our corporate network or any of our mail properties were attacked.  We work closely with the authorities and other technology companies like Google on Internet safety issues, and we will continue to actively monitor this situation.  As Google and the State Department have indicated, this situation is the subject of an ongoing international investigation, so it is not appropriate to say anything further

    See also our recap of reactions, Google’s China Gambit: Day Two Reaction.



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