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In a fascinating post on its corporate blog, Google has threatened to pull out of the Chinese market following attempts to access the Gmail accounts of Chinese human rights activists and an attack on Google’s corporate network “originating from China”.

Publicly anyway, Google claims to be putting its Chinese business on the line, stating that it will stop the highly-contentious policy of filtering search engine results on the google.cn domain according to the wishes of the Chinese Government – or leave China if it is not allowed to.

Google’s senior vice president of corporate development and the web giant’s chief legal officer David Drummond writes:

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.

Chinese hack job gets political

Google reigns supreme everywhere... except China

Google is a distance second in the Chinese search market.

The story has gone political with US Secretary of State, Hilary Rodham Clinton, issuing the Chinese a “please explain”, no doubt fresh from briefings on the last major high profile hacking expeditions originating from China which targeted government networks and the White House itself. This Popular Science article gives some good background to the increasingly sophisticated Chinese hacking efforts and the alarm they are causing in the US intelligence community. With Google claiming “at least 20″ other mainly Silicon Valley based companies also the target of hacking activity from China, the story has been elevated to one of national importance just as Clinton heads on an Asian tour that will take in New Zealand later this month.

Human rights activists are applauding Google’s hard-line response to the hacking attempts as a valiant attempt to polish up its tarnished “don’t be evil” motto. Numerous analysts have pointed out the huge gamble Google is taking in threatening to turn its back on the fast-growing Chinese market, while others suggest Google, with only 31 per cent of the online search market is willing to sacrifice its fledgling Chinese business for more cynical goals. After all, with increasingly loud calls for Google’s power to be limited in the US and other markets, a clear signal from the company that it is determined to put ethics and principles ahead of profit could be well-timed and a good sympathy-winner when any type of anti-trust activity against Google is considered.

Shot over the bow likely to succeed?

Personally though, I think this is a genuine move by Google to take a stand against human rights abuses, web-based industrial espionage efforts that do nothing for the image of cloud computing and an attempt to erase some of the bad will created when it caved to the Chinese Government’s demands and filtered out results for such searches as “Tiananmen Square” on Google.cn.

It could also be an attempt by Google to use a high-profile hacking attempt to pressure the Chinese Government to at least loosen or remove filtering restrictions on search engines. Who knows what negotiations are going on behind the scene, but its a high stakes game for Google.

Google is saying that China’s activities are creepy and potentially damaging to its business so it is willing to give Baidu, its heavyweight Chinese competitor, the search market in China rather than keep quiet and play ball with the Chinese Government.

For that, Google should be applauded because if the track record of the Chinese is anything to go by, Google may need to seek an early termination on the leases for its three Chinese offices.




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