Google set to announce closure of Chinese Search Engine operations

Google may be set to announce its plans for its China operations and the closure of its search engine in China as early as today.

Reports in the Financial Times on Monday cited persons familiar with the matters. The FT speculates that Google may close all its business in China, making around 600 people out of jobs. A closure of full operations would see the search giants Google.cn domain closed down as well as a research subsidary that operates in China.

Earlier this month the WSJ reported that Google was trying to lock in a deal with China. Google was reportedly in talks with several Chinese agencies “to allow it to operate some parts of its business in a patchwork arrangement”.

Google revealed in January that they, along with a number of other large companies in the Internet, finance, technology, media and chemical sectors, were targeted in a sophisticated cyber-attack. The attack on their infrastructure originated in China, and resulted in the theft of intellectual property.

Due to this attack, and the background behind it, Google took a second look at their operations in China, particularly Google.cn, where they currently offer censored search results as part of an agreement with China's government. Google took a big step and informed the government of China that it was no longer willing to provide censored results, and entered into discussions regarding how it could do this without breaking Chinese law. It appears China and Google have been unable to reach an agreement and that the search giant may well close its offices.

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42 Comments

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I wish Google would have just left their search engine up and stopped censoring results. One day everybody wakes up and everything is open, free, and accessible. Telling the government that you "want" to stop censoring results is like telling your neighbor you "want" to break into his house and steal his belongings the night before by asking for approval before you do it. You think he'll just back down and let you? No, he'll install a security system. He'll protect himself. The key is to just do it! Not to mention, the old saying goes "it's easier to ask for forgiveness than permission."

China and its citizens would be much more positively affected by being presented with a glimpse at the free world outside its borders for a few hours or days until China blocked Google.cn. Instead now, the only thing Chinese citizens know is that which the state media told them: "Google is playing politics against China to negatively influence it with Western culture." That may be true, but it is biased. The people of China should be able to choose whether to experience Western culture. They don't have to use Google's services, that's why Baidu is successful. But Google still held 30-40% of the Chinese search market, and that certainly says a lot about a 1/3 of their population.

cekicen said,
Google is closing google.cn not google.com. They can still visit google.com or google.co.uk or google.gr etc...

Add Rule greatfirewall_of_china google.* deny-all

shial said,

Add Rule greatfirewall_of_china google.* deny-all

Yeah. Since the results were censored, google.cn was probably the only site they could get to...

cekicen said,
Google is closing google.cn not google.com. They can still visit google.com or google.co.uk or google.gr etc...

That's what I was thinking several hours ago.

Now turns out Google has filter out google.com too, the page automatically redirects to google.com.hk which is shown and sorted in Chinese language even though I have a operating system configured in U.S. English and set all the language settings in browsers to view English pages by default. This is really ****ing me off, guess I have to use Yahoo Search as my start page for now.

Stupid move, on par with Yahoo rejecting Microsoft's $32B offer.
And these pseudo-Google fanboys going all goey on how Google took a stance is makign me sick, stupid is still stupid, and Google isn't a charity its wants money and power and thats it. They went in knowing what to expect and now they cry foul, No sympathies what so ever.
Don't tell me how to run my own place.
Oh btw it still stores you private info, brag about that while you are at it.

DOOOMKULTUS said,
They went in knowing what to expect ...

Really !?? you think they knowingly went there to get hacked and have their IP stolen... really ?!


Google have much to loose if China stole their search engine code. Even business wise it might not be such a bad idea to get out before it's too late.

Edited by Ikshaar, Mar 22 2010, 3:21pm :

DOOOMKULTUS said,
Stupid move, on par with Yahoo rejecting Microsoft's $32B offer.
And these pseudo-Google fanboys going all goey on how Google took a stance is makign me sick, stupid is still stupid, and Google isn't a charity its wants money and power and thats it. They went in knowing what to expect and now they cry foul, No sympathies what so ever.
Don't tell me how to run my own place.
Oh btw it still stores you private info, brag about that while you are at it.

As others have stated, not everything is about money. However, Google makes plenty of coin without China, in fact they probably make very little revenues from China. I highly doubt that this will hamper their business especially since the rest of the world's 4.5 billion people can still access it. I agree with other's sentiment that Google is doing the right thing here and not dealing with the shady-ass Chinese government's demands to censor search results.
Besides, revolution will come one day and Google will go right back in there when there is a semblance of free speech.

Can't have affected Google's bottom line that much, they wouldn't do it otherwise. Are censored results worthless to Google as it sells user data etc. to third parties ? Maybe, what use is the data if it's censored by the state ? possibly little. Companies get hacked all the time, that isn't the main reason for leaving China. Google took a chance to get a more open data gathering stream and China called their bluff. Turn the PR into something positive and return in the future.

WooHoo!!! said,
Can't have affected Google's bottom line that much, they wouldn't do it otherwise. Are censored results worthless to Google as it sells user data etc. to third parties ? Maybe, what use is the data if it's censored by the state ? possibly little. Companies get hacked all the time, that isn't the main reason for leaving China. Google took a chance to get a more open data gathering stream and China called their bluff. Turn the PR into something positive and return in the future.
Their stocks took a dump last week when this first came to light as an actual real possibility.

This is nice, but I wish American manufacturers could give Wal-Mart the finger and bring some operations back out of China. Unfortunately, so many Americans are too ignorant to shop anywhere but Wal-Mart.

Skwerl said,
This is nice, but I wish American manufacturers could give Wal-Mart the finger and bring some operations back out of China. Unfortunately, so many Americans are too ignorant to shop anywhere but Wal-Mart.

And where would these items be made? We have shuttered up and sold off just about all our manufacturing processes, you can't just flip a switch and have a manufacturing plant.

IF we were to start producing again it would take decades to get back to where we were 20 some odd years ago, and be behind the ball, is it really worth the effort?

z0phi3l said,

And where would these items be made? We have shuttered up and sold off just about all our manufacturing processes, you can't just flip a switch and have a manufacturing plant.

IF we were to start producing again it would take decades to get back to where we were 20 some odd years ago, and be behind the ball, is it really worth the effort?

Right. Since it won't happen overnight, so let's just stick with the status quo.

Skwerl said,

Right. Since it won't happen overnight, so let's just stick with the status quo.

What you're saying really doesn't make sense, or show an understanding of economics... Not only would we have to build factories, processes, and such, but our cost of manufacturing would be 10 times (?) what it is in China... Keep in mind that the workers on the auto lines in Detroit were making an average of $ 130,000 a year with benefits... The average unionized labor cost outside of the country was around $ 40,000... And non unionized was under $ 30,000... So we can't compete in manufacturing... That's why all of those jobs left the country.

I wonder how much money they were actually making in China?
Pretty easy way to lay off 600 people, with good PR.

acnpt said,
I wonder how much money they were actually making in China?
Pretty easy way to lay off 600 people, with good PR.

I dunno. That would be an interesting figure...

I don't think that's why they did this though...

cork1958 said,
First time ever Google has done something right!!
Err, lolwat? I'm pretty sure they must've done something right to be the largest search engine?

While this will help their image in the west (and tarnish China's), really this is going to have hardly any effect on Chinese netizens. :-/ Living in Hong Kong, I'm glad and proud to be able to live in freedom, but my occasional trips to mainland China shows that nobody really cares about Google and such there. They all have their Baidu and whatnot and that's not going to change. Heck, I doubt many Chinese would even KNOW that Google is drawing out.

Bioran23 said,
While this will help their image in the west (and tarnish China's), really this is going to have hardly any effect on Chinese netizens. :-/ Living in Hong Kong, I'm glad and proud to be able to live in freedom, but my occasional trips to mainland China shows that nobody really cares about Google and such there. They all have their Baidu and whatnot and that's not going to change. Heck, I doubt many Chinese would even KNOW that Google is drawing out.

They have 43% of the market in China, I think people will notice.

Brent1700 said,

They have 43% of the market in China, I think people will notice.

It will be noticed, but I agree that it won't make a huge difference overall. Tbh, even if Google shut down ALL of its operations across the globe, the world would still survive , it would just be a darker place...

Nick Brunt said,

It will be noticed, but I agree that it won't make a huge difference overall. Tbh, even if Google shut down ALL of its operations across the globe, the world would still survive , it would just be a darker place...

LOL!

I agree. There are other search engines, so is Google good? Sure. But it isn't indispensable...

I give credit to Google, they are one of the few groups that will actually stand up to China. It may hurt their market share, but, it will help out their image.

SHoTTa35 said,
Wow, talk about making a bold move.

Good for them. I just hope they are remembered for making a stand rather than running away. This is a win for Google in many ways, even if it doesn't make the best business sense. It means so much more than that.

Nick Brunt said,
Good for them. I just hope they are remembered for making a stand rather than running away. This is a win for Google in many ways, even if it doesn't make the best business sense. It means so much more than that.

I know I'm playing devils advocate here, but how is this "Making a Stand"? China's laws are China's laws, and if Google don't want to play by the rules, then they have no choice but to GTFO. If anything, Google overstepped the mark by trying to impose a net culture on the Chinese where they had no right to, especially since they're a minority market share.

I fully support Google standing by their business policies, but if you're going to try and lay down an ultimatum for a country to change its entire censorship policy, then you know how it's going to end.

I also have the feeling that Google isn't making much of a sacrifice here. There is some sacrifice, that's for sure, but I'd like to get an actual answer as to how this will affect their business. If it were to impact it severely, the shareholders wouldn't have approved this at all.

Majesticmerc said,

I know I'm playing devils advocate here, but how is this "Making a Stand"? China's laws are China's laws, and if Google don't want to play by the rules, then they have no choice but to GTFO. If anything, Google overstepped the mark by trying to impose a net culture on the Chinese where they had no right to, especially since they're a minority market share.

I fully support Google standing by their business policies, but if you're going to try and lay down an ultimatum for a country to change its entire censorship policy, then you know how it's going to end.

I also have the feeling that Google isn't making much of a sacrifice here. There is some sacrifice, that's for sure, but I'd like to get an actual answer as to how this will affect their business. If it were to impact it severely, the shareholders wouldn't have approved this at all.

This goes beyond the laws of any one country, it's a moral issue about the right to information. If a country had a law which stated that you had to kill a child every Sunday and you refused to, you wouldn't be in the wrong. I know it's an extreme example but it just proves that just because something is a law does not mean it's the right thing to do.

I think that Google standing up for freedom of information is not "crossing the line" in any way. It's the right thing to do.

Majesticmerc said,
I also have the feeling that Google isn't making much of a sacrifice here. There is some sacrifice, that's for sure, but I'd like to get an actual answer as to how this will affect their business. If it were to impact it severely, the shareholders wouldn't have approved this at all.

The primary shareholders are those in charge of Google. Considering that China is around 1.5 billion people in size, they are missing out on a huge advertising market, with around 35% of the search market share within China.

Honestly, I think this has less to do with doing the right thing rather than amazingly good free press, and protecting themselves from a culture known for stealing. In terms of the latter, Google undoubtedly did a risk analysis comparing staying there and leaving. If they stay there, China would almost certainly get someone within the company, eventually, and give away all of their trade secrets to the Chinese operated Baidu search engine--destroying their investments. Additionally, the Chinese's arrogance in terms of hacking presents a huge, unnecessary risk for their entire business (I can imagine they are much more inclined to trust data coming from their internal Google.cn network than other .cn traffic).

Add to that the substantial burden of doing business in China (laws, especially filtering) and I cannot imagine wanting to do business in China, except for greed. China is not growing because they are an amazing place to live; they are growing because they provide cheap labor to the entire detriment of its own people, and because they steal everything from the companies dumb enough to do business there.

This includes Microsoft and Apple. How long before computers coming from China are discovered to have hidden hardware meant to provide a back door into computers?

I think that Google standing up for freedom of information is not "crossing the line" in any way. It's the right thing to do.

Yes, its the right thing to do in our eyes, but if Google DO pull out of china, that would be worse than the current situation since they will no longer have ANY influence inside the country.

Google's actions are akin throwing a tantrum because they can't have that shiny new bike. They can't get their own way, so they aren't going to persevere, leaving the Chinese people's choice on information sources even more restricted. That doesn't sound particularly "morally correct" does it?

At the end of the day, there must have been a business case for this. Maybe pulling out of china reduces server load because they no longer have to apply a specific filter for the Chinese IP address range? Maybe they feel there is a security risk associated with the Chinese [government] having access to their servers? Like I said, business is money oriented, and the shareholders wouldn't have approved something that would significantly hit their stock price.

Don't get me wrong, I fully support Freedom of Informationâ„¢, but Google's tactics here have further reduced the Chinese people's access to potential information and lolcats, and (assuming that they are trying to be morally responsible) have hurt their own cause.

------------

tl;dr
Even if Google's intentions were to be morally responsible, they're going the wrong way about it.

Majesticmerc said,

At the end of the day, there must have been a business case for this. Maybe pulling out of china reduces server load because they no longer have to apply a specific filter for the Chinese IP address range? Maybe they feel there is a security risk associated with the Chinese [government] having access to their servers? Like I said, business is money oriented, and the shareholders wouldn't have approved something that would significantly hit their stock price.

Don't get me wrong, I fully support Freedom of Informationâ„¢, but Google's tactics here have further reduced the Chinese people's access to potential information and lolcats, and (assuming that they are trying to be morally responsible) have hurt their own cause.

The reason they have pulled out is because they CAN'T provide free information to the Chinese people. Staying there under the same conditions as before is not helping the Chinese access information at all. They were effectively offering the same service as Baidu - a censored service. Staying there serves as no overall service to the Chinese people as they are unable to give them any more information than they can already obtain. Moving out sends a message.

As far as the shareholders are concerned, the only ones that matter are Larry, Sergey and Eric because they control over 50% of the company between them. So saying that "the shareholders wouldn't approve it" doesn't matter because at the end of the day it's down to those three and they can do whatever they want with their company.

Edited by Nick Brunt, Mar 22 2010, 5:39pm :