Wednesday, January 13, 2010

To boldly take a stance and still not hurt one's bottom lines (not very much at least)

(Unfinished copy, heavy editing may continue)

Official Google Blog: A new approach to China: "We have decided we are no longer willing to continue censoring our results on, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all."

One question that probably does not need to be asked here is whether Google is being responsible towards its shareholders by potentially shutting itself out of the Chinese markets. Analysts seem to agree, according  to Miguel Helft of the New York Times. Google has come under a lot of fire for being no different than Microsoft or Yahoo!

Google might have a better leverage than most competitors in this situation. The most prominent hardware Google sells to the consumer space is from htc based in Taiwan (see Nexus One for details). The best case scenario here is that Google and the Chinese government are able to come to an agreement that allows benefits beyond Google.

While WSJ's fears (I quote "Technically, most of Google's partnerships and other investments could continue, but by snubbing Chinese authorities so publicly, the company risks government retaliation against itself or its partners.") seem valid, retaliation puts the Chinese government in the spot light, and this is not a very good way to be in the spotlight. I strongly suspect that there will be some agreement that will be a least damaging option damaging to both the Chinese government and to Google. Then again, this suspicion is not based on any knowledge on the ground but on pure, unadulterated speculation.

Any international competitor need not rejoice at a potential Google exit from China. Google's bold moves make it precarious for any international company to directly benefit from a possible Google shut-down in China. Anyone taking Google's number two spot in China is bound to come under heavy pressure to follow Google's lead, something they may not be able to do because of existing relationships. Talk about being caught in between a rock and a hard place!

A realy dumb disclosure: I just need to remind readers that Google owns Blogger and blogspot that I use to write this blog. This service is free of cost from Google. I do not work for Google or receive any money in exchange for writing for this blog. Thank you!

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