Twenty seven Chinese companies that have purchased ads on Google's search engine have banded together to demand answers from Google, stating that they placed pre-payments on keywords and that if Google were to shut down its Chinese business that it could have drastic effects. Google's business dealings in China account for roughly 1% of their revenue, but the company currently employs 700 people. The Chinese government also delayed the launch of the Android-operated phones from Samsung and Motorola solely due to their association with Google.
The large issue with Google pulling out of China is that people were depending on their services to be the helpful hand that would pull the nation out of a censorship-state. True, Google is not the largest search engine within the nation [holding a 35% market share], but the removal of the beacon of free speech in the east would represent the ability of the Chinese government to dictate, once and for all, what its citizens can and can not look at.
Some claim that Google sacrificed its moral standing when they entered China's market five years ago, initially complying with the nation's censorship demands. Google needs to tread softly in this time of trial, as their final decision is not simply a business one - it is morally and politically involved as well.
While I've never actually visited or lived in China, many of the things I've heard involving Governmental regulations are harsh and severely monitored. I first heard of this story a few months ago when it was initially developing, and in the beginning before Google launched it's official response I had a feeling this is how things would turn out. With Google having such a low potential for profit in China, it's easy to see why this was the outcome.
ReplyDeleteThis is a interesting situation that is going on there. Thou Google only generates 1% revenue in that market it could generate a lot more if they could establish even a fourth of what they generate in the U.S their business would flourish dramatically. But when ethics coming in to play a company has the right to choose business with whom they want.
ReplyDeleteIm not actually surprised, China has such a tight realm of control over the country. Im not surprised that they want to protect the information getting to their society. But its to bad theres alot of information over there I would like to know more about.
ReplyDeleteI had heard some of the issues concerning Google and China before but I wasn't clear what it was all about. Your point that this isn't simply a business decision is right on. This topic relates to all countries considering that many companies are now global.
ReplyDeleteI guess I'm pretty amazed that companies want to do business in China. It seems to me that there are so many regulations and red tape with the government that the profits would hardly be worth it. I guess they must be pretty substantial.
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