Entering the Dragon’s Lair: Google vs. Beijing

It is a tense war between the largest Internet search engine in the world and China. After having reported hacker attacks from China, Google threatened to stop operating in the People’s Republic of China. “These allegations,” said Secretary of State Hillary Clinton, “raise very serious concerns and questions. We look to the Chinese government for an explanation. The ability to operate with confidence in cyberspace is critical in a modern society and economy.”

Google – no more censorship: The colossal search engine has decided not to filter information on its Chinese site anymore, recognizing that this could mean closing its operations in China. The American group, in addition to some other large companies, claims to have been subjected to repeated hacker attacks from China targeting Chinese militants for human rights. According to the online edition of The New York Times, the opposition activists’ email accounts were violated by Chinese hackers. “The primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists,” writes the group from Mountain View, without directly attacking the Chinese government, but specifying, “We have decided we are no longer willing to continue censoring our results on Google.cn.” The American company recognizes that this decision could force it to close its Chinese site and its offices in the country.

How will this arm wrestling between Google and China end? The giant from Mountain View could decide to keep its stance and leave the Chinese market and the inevitable retaliation of the Chinese regime. Google could also go back, accepting some bland punitive measures, even if that would not create a very positive image. Another hypothesis is that Google may be able to get Beijing to change a bit with a partial liberation of the web, although this is not very feasible. The last option, and perhaps the most likely, is that Google will leave the Chinese market. Its competitors would take over its share of the market.

Forbidden images reappear: In the uncensored version of Google, all of a sudden the images of the boy who stopped the tanks in Tiananmen Square have reappeared, as well as those of the Tibetan spiritual leader, the Dalai Lama.

The search engine Baidu: The conflict between Google and Beijing helps Chinese rival Baidu, Inc., whose stock already jumped 15.3 percent before Wall Street’s opening. The Chinese search engine has 60 percent local market share, compared to Google’s 30 percent. Today China has a small impact on the business of the Page and Brin group, however given the numbers (there are 1.3 billion Chinese) there is enormous growth potential: in 2009 the market grew 40 percent.