While Chinese netizens laid wreaths outside the Google headquarters in Beijing yesterday, a short distance away the executives of Baidu, the biggest Chinese search engine, must have been thinking of popping champagne corks.
Google’s decision to pick a public fight with the censors is almost certain to cement Baidu’s control of the world’s fastest growing Internet market, in which dominance requires compliance.
While the move has won plaudits from freedom-of-expression groups, business-minded critics said Google had made a strategic error.
“This is the most stupid decision in their history,” Tang Jun (唐駿), a former president of Microsoft China, told Eastday.com. “Giving up China means giving up half of the world.”
But the binning of the “devil’s bargain,” accepted by many foreign firms in order to do business in China, is determined by a cost analysis taking account of brand value as well as profit.
In financial terms, Google.cn’s filtering of information on politically sensitive topics has not been well rewarded. While the Chinese Internet market has expanded to 338 million people, Google’s business in China has been undermined by clashes with the censors and an uneven playing field. “Guge” (谷歌), as the firm is known locally, has 12 percent to 17 percent of the queries, and 33 percent of the income in the Chinese search market. Baidu has almost all the rest.
While Google’s 800 staff could lose their jobs now, the impact on the firm’s global revenues will be small, perhaps 1 percent to 2 percent of the total. This has prompted cynicism over its motives behind the decision to champion free speech.
Rumors about the firm quitting China had been circulating since September, when Lee Kai-fu (李開復), a former chief executive, left to set up his own venture.
Several other leading US Internet companies, including eBay and Yahoo, have beaten a retreat or changed strategy in recent years after failing to challenge Chinese rivals. If Google is pushed out of this market now for adopting a confrontational stance, it could regain lost credibility overseas.
Kaiser Kuo, a consultant to Youku, a video-sharing Web site, said of Google’s position: “It looks like a smokescreen of sanctimony ... being done to draw the eye away from the ignominy of a humiliating retreat. But I suspect their motives are more earnest. Google may have a paltry market share compared to Baidu, but this is not a market to be sneezed at.”
In the long-term, analysts said, China’s domestic market would be a loser, too.
“If Google goes, Baidu will be the only giant in China’s search engine market. A monopolized market can’t be healthy,” said Cao Junbo (曹軍波), chief analyst at iResearch.
Google’s move also reflects badly on firms that do comply with the censors.
Hu Yong, a new-media academic, said: “Google’s market share is not very big, but their loss would definitely not be good for the Chinese market. It damages the image and credibility of the internet industry.”
Baidu declined to comment on the fate of its competitor but said it had no intention of following suit by challenging the censors.
“Baidu will always go along with Chinese laws,” a spokesman said.
Yahoo, Microsoft and Cisco accept that principle, but human rights groups said Google’s revelations on the hacking and its stand on censorship could set an example.
“This is a wake-up call to the international community about the real risks of doing business in China, especially in the information communications technology industry — an industry essential to the protection of freedom of expression and privacy rights,” said Sharon Hom, executive director of Human Rights in China.
Pat Gelsinger took the reins as Intel CEO three years ago with hopes of reviving the US industrial icon. He soon made a big mistake. Intel had a sweet deal going with Taiwan Semiconductor Manufacturing Co (TSMC), the giant manufacturer of semiconductors for other companies. TSMC would make chips that Intel designed, but could not produce and was offering deep discounts to Intel, four people with knowledge of the agreement said. Instead of nurturing the relationship, Gelsinger — who hoped to restore Intel’s own manufacturing prowess — offended TSMC by calling out Taiwan’s precarious relations with China. “You don’t want all of
A chip made by Taiwan Semiconductor Manufacturing Co (TSMC) was found on a Huawei Technologies Co artificial intelligence (AI) processor, indicating a possible breach of US export restrictions that have been in place since 2019 on sensitive tech to the Chinese firm and others. The incident has triggered significant concern in the IT industry, as it appears that proxy buyers are acting on behalf of restricted Chinese companies to bypass the US rules, which are intended to protect its national security. Canada-based research firm TechInsights conducted a die analysis of the Huawei Ascend 910B AI Trainer, releasing its findings on Oct.
In honor of President Jimmy Carter’s 100th birthday, my longtime friend and colleague John Tkacik wrote an excellent op-ed reassessing Carter’s derecognition of Taipei. But I would like to add my own thoughts on this often-misunderstood president. During Carter’s single term as president of the United States from 1977 to 1981, despite numerous foreign policy and domestic challenges, he is widely recognized for brokering the historic 1978 Camp David Accords that ended the state of war between Egypt and Israel after more than three decades of hostilities. It is considered one of the most significant diplomatic achievements of the 20th century.
In a recent essay in Foreign Affairs, titled “The Upside on Uncertainty in Taiwan,” Johns Hopkins University professor James B. Steinberg makes the argument that the concept of strategic ambiguity has kept a tenuous peace across the Taiwan Strait. In his piece, Steinberg is primarily countering the arguments of Tufts University professor Sulmaan Wasif Khan, who in his thought-provoking new book The Struggle for Taiwan does some excellent out-of-the-box thinking looking at US policy toward Taiwan from 1943 on, and doing some fascinating “what if?” exercises. Reading through Steinberg’s comments, and just starting to read Khan’s book, we could already sense that