The Biggest PR Stunt of All Time?

Being in Asia during the start of the Google/China war has been an interesting experience.

I have been reading local publications to keep up with the story, and am shocked by the difference in coverage I see on the western blogosphere. For one thing the idea that China itself was behind a large scale hack of dissident Gmail accounts has been played down here, where it has become widely accepted as a practical certainity in the West.


But what really fascinates me in the coverage of this conflict is the exploration of Google’s motivations. Western bloggers from Robert Scoble to Fred Wilson have hailed Google’s move as an impressive example of the company’s moral philosophy. In response TechCrunch bloggers Paul Carr and Sarah Lacy have argued that Google’s decision to leave China was motivated by pragmatism and self interest, not the companies “Don’t be evil” motto.

Carr and Lacy are right. Google isn’t doing this because of its companies (or founders) moral philosophies. In fact Google’s threat to pull out of China may just be the greatest PR stunt of all time.

Here are the facts – Google’s search market share in China is small. The market is dominated by Baidu which gets over 77% of the search volume in mainland China. In China Google is more like Yahoo or Bing than Google. While, Google’s market share was increasing, the Chinese market made up a sliver of the companies worldwide profitability. In fact, the company earns less than one percent of it’s profits from its Chinese operations. In recognition of all this, Google’s leader in China – Kai-Fu Lee – left the company last September, telling Tech Crunch’s Sarah Lacy 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.” So the prospects for Google in China were bleak.

Then in December the Chinese government hacked Gmail. They straight up broke into the Gmail boxes of scores of Chinese dissidents. At this point the Google guys made a rational calculus between two clear options:

Option 1: Stay in China – a relatively tiny part of the global search giants success, a place where its prospects for long term success were bleak – and face the wrath of the globe when the story broke that the Chinese government could hack into anyone’s Gmail and that there was nothing Google could do about it.

or

Option 2: Ditch china in a triumphant stand against censorship and oppression!

No less than a month ago the same bloggers who are praising Google today were questioning the power of its monopoly. By leaving China and spinning it as a huge sacrifice of future power and profit, Google is winning back the support of the masses who had begun to doubt its benevolence. Perhaps Google really believes in a world without evil.

In reality Google has made a shrewd calculation that leaving China provides a net benefit for the reputation (and thus long term power and influence) of the company in all other (far more profitable) parts of the world.

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The Biggest PR Stunt of All Time?

Being in Asia during the start of the Google/China war has been an interesting experience. I have been reading local publications to keep up with the story, and am shocked by the difference in coverage I see on the western blogosphere. For one thing the idea that China itself was behind a large scale hack of dissident Gmail accounts has been played down here, where it has become widely accepted as a practical certainity in the West.
But what really fascinates me in the coverage of this conflict is the exploration of Google’s motivations. Western bloggers from Robert Scoble to Fred Wilson have hailed Google’s move as an impressive example of the company’s moral philosophy. In response TechCrunch bloggers Paul Carr and Sarah Lacy have argued that Google’s decision to leave China was motivated by pragmatism and self interest, not the companies “Don’t be evil” motto.
Carr and Lacy are right. Google isn’t doing this because of its companies (or founders) moral philosophies. In fact Google’s threat to pull out of China may just be the greatest PR stunt of all time.
Here are the facts – Google’s search market share in China is small. The market is dominated by Baidu which gets over 77% of the search volume in mainland China. In China Google is more like Yahoo or Bing than Google. While, Google’s market share was increasing the Chinese market made up a sliver of the companies worldwide profitability. In fact, the company earns less than one percent of it’s profits from its Chinese operations. In recognition of all this Google’s leader in China – Kai-Fu Lee – left the company last September, telling Tech Crunch’s Sarah Lacy 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.” So the prospects for Google in China were bleak.
Then in December the Chinese government hacked Gmail. They straight up broke into the Gmail boxes of scores of Chinese dissidents. At this point the Google guys made a rational calculus between two clear options:
Option 1: Stay in China, a relatively tiny part of the global search giants success, a place where its prospects for long term success were bleak and face the wrath of the globe when the story broke that the Chinese government could hack into anyone’s Gmail and that there was nothing Google could do about it.
or
Option 2: Ditch china in a triumphant stand against censorship and oppression!
No less than a month ago the same bloggers who are praising Google today were questioning the power of its monopoly. By leaving China and spinning it as a huge sacrifice of future power and profit, Google is winning back the support of the masses who had begun to doubt its benevolence. Perhaps Google really believes in a world without evil.
In reality Google has made a shrewd calculation that leaving China provides a net benefit for the reputation (and thus long term power and influence) of the company in all other (far more profitable) parts of the world.
Then in December the Chinese government hacked Gmail. They straight up broke into the Gmail boxes of scores of Chinese dissidents. At this point the Google guys made a rational calculus between two clear options:
Option 1: Stay in China, a relatively tiny part of the global search giants success, a place where its prospects for long term success were bleak and face the wrath of the globe when the story broke that the Chinese government could hack into anyone’s Gmail and that there was nothing Google could do about it.
or
Option 2: Ditch china in a triumphant stand against censorship and oppression!
No less than a month ago the same bloggers who are praising Google today were questioning the power of its monopoly. By leaving China and spinning it as a huge sacrifice of future power and profit, Google is winning back the support of the masses who had begun to doubt its benevolence. Perhaps Google really believes in a world without evil.
In reality Google has made a shrewd calculation that leaving China provides a net benefit for the reputation (and thus long term power and influence) of the company in all other (far more profitable) parts of the world.

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