Yet More Google/China

A few more bits and pieces from this story. First, in the comments from the last one JJ asked-

Do you think that's more due to it being a PR disaster for google in the US or because of the escalating problems with the Chinese government making the situation unworkable from a business standpoint? Or both?

The business standpoint is interesting. Google has been fighting an uphill battle against Baidu, a Chinese site which is the preferred search engine for about 60% of Chinese netizens. I've seen a few numbers for Googles share, but they all seem to range from the low teens to about 20%. The other big thing is that one of the big Chinese telecom companies was set to be the distributor for the Google phone, which they were presumably hoping would compete well with the iphone. I'm not sure how much money they were making, but it seems like they decided that keeping their smallish market share isn't worth dealing with all this nonsense.

The story about them pulling out because they were being hacked is also a bit suspect. Pulling out of China won't make Chinese hackers leave them alone if they're out to steal Google code. They can still try to hack Google from across the Pacific, no big deal. It does make a bit more sense if Chinese Google employees were involved though.

6.54 linked to a story about how political motives probably played a part in the decision. Yahoo got in trouble for their role in getting a number of Chinese dissidents jailed, and there have been rumblings about prosecuting American companies who continue to assist Beijing. Making a big deal about how they can't abide by Chinese law anymore will probably put them in better footing with Washington, even if the real reason they're leaving is because they're tired of Chinese employees stealing valuable code while Chinese netizens largely continue to rely on Baidu.

They've also been playing up how much importance they place on freedom of information, but their ideals clearly didn't stop them from setting up shop in China in the first place. Google statements about how they went to China to offer better information to the Chinese are pretty silly, because they agreed to play by Chinese rules which specifically prevent them from passing any useful information to Chinese citizens.

The only positive aspect of this story for the Chinese is that this has the potential to drastically increase awareness of the extent to which Beijing is censoring information. When you go to forbidden pages in China it doesn't say "THE GOVERNMENT DOESN'T WANT YOU TO SEE THIS, GO AWAY!" The message it displays looks like a standard 404 site not found error, leaving people to wonder if the site is down or if there are connection problems. Having more people in China talking about the extent to which their government lies to them is definitely a good thing- a number of the comments on Chinese message boards slammed Baidu for being explicitly controlled by the government.

Edit: Now I've seen a few sources saying Google has about a third of the search engine market. These sources include the WSJ and James Fallows, so...