[Marxism] Wall Street Journal: "Google Meets China"

[Walter Lippmann <walterlx@xxxxxxxxxxxxx>]

The Chinese market is so big that US corporation have a choice of obeying
the local laws or not being able to do business in that country. The amount
of money which US companies can make in China causes them to obey the
law. There is nothing surprising about that, and their shouldn't be. While the
Chinese authorities try to regulate information, as all societies do, each in
their own way, others do the same thing. In a place like the United States,
information can be buried in a myriad of choices. Readers in the US must
think it weird that the Chinese authorities would want to block access to any
information about Falun Gong, a peculiar religious sect which the Chinese
feel threatened by. In Cuba, by the way, they block access to things like
the Cuban American National Foundation and CubaNet as well as other anti-
Cuba sites, but not the Miami Herald and others of that nature.

I find Cuba's blocking of such sites a nuisance for my work, because I need
to look at the sites run by the Miami Militants from time to time, it's hardly a
thing one should get all bent out of shape at. It's Cuba's right to determine 
its
own destiny. That includes the right to do things which foreigners may not
approve of. But it's their country and I am a foreigner and a guest there.

Venezuela is applying similar restraints to foreign private corporations and
have no fear, Evo Morales is just as likely to utilize the advantages which
being the elected president of his country makes possible. Ultimately, it's
the diplomatic and political equivalent of good manners. When I come to
your house and you ask me to take my shoes off because you've just put
in new flooring, I do that because you ask me to. I might think that it's a
little odd, but I respect your right to decide how guests behave in your
home. I fail to see what this causes so much distress for some people.


Walter Lippmann
=================================================

December 16, 2005

PAGE ONE

Limited Search
As Google Pushes Into China,
It Faces Clashes With Censors

Executives Wrestled With Issue
As Others Took the Lead;
Now, It's Charging Ahead
What 'Don't Be Evil' Means
By JASON DEAN in Beijing and KEVIN J. DELANEY in San Francisco
Staff Reporters of THE WALL STREET JOURNAL
December 16, 2005; Page A1

Google Inc. became a business superstar by relentlessly following one goal: 
making the world's information "universally accessible and useful." Now its 
ambitions overseas are bringing it up against a government whose philosophy is 
very different: China.

Yahoo Inc. and other rivals have been operating in China for years. Google has 
offered a Chinese version of its familiar search service, but it had no offices 
or employees in China until this year. That hindered its ability to compete for 
traffic and advertising among China's rapidly growing base of more than 100 
million Internet users, already the world's second-largest, after that of the 
U.S.

Today, Google is rushing to catch up in a bid to remain competitive globally. 
But the move into China is giving the country's censors and security officials 
greater potential leverage over Google -- whose corporate mantra is "don't be 
evil." Beijing believes that the Internet must be firmly controlled to maintain 
social stability and, ultimately, the Communist Party's hold on power. It 
requires Internet companies operating in China to comply with the country's 
stringent censorship and security laws. Already, Google has been tailoring part 
of its service to omit sources blocked by Chinese censors. For example, when a 
user in China searches Google's news service, sites related to Falun Gong and 
other groups banned by the government don't show up.

Interviews with company executives, public statements and company documents 
filed as part of a continuing lawsuit show how Google finally decided to move 
into China after wrestling with reservations over how to reconcile Beijing's 
restrictions with its own principles. In the end, the opportunity in China 
proved too important to resist.

Google has paid a price for coming late to China. While the company's leaders 
debated its strategy there, Baidu.com Inc., a local rival in which Google last 
year bought a small stake, surged; it now ranks as China's most popular search 
site. That has left Google facing a rare uphill battle in the Internet search 
business it helped define. At a board meeting in July, Chief Executive Eric 
Schmidt cited "serious local competition" as a reason China topped his list of 
concerns, according to a court document.

"Probably we should have come earlier, but certainly better late than never," 
says Kai-Fu Lee, a longtime Microsoft Corp. official whose high profile in 
China was one of the reasons Google hired him in July to help run its new 
Chinese operation. Microsoft has filed a lawsuit against Google and Mr. Lee in 
Washington state court alleging Mr. Lee violated a noncompete agreement.

Since Mr. Lee joined Google, the company has signed up a string of local 
partners to sell its online ads. Mr. Lee has been setting up a research and 
development center in Beijing and toured 25 Chinese universities to drum up 
interest in working there. Google is also preparing a marketing blitz.

While other countries set some limits on what people can put on the Internet, 
China's constraints are perhaps the world's most extensive. It can be difficult 
to figure out just who enforces the rules and how. Numerous agencies -- from 
the National Administration for the Protection of State Secrets to the General 
Administration of Press and Publications -- have jurisdiction over the 
Internet. Foreign companies operating in China are obliged to comply with rules 
that block access to online content deemed politically unacceptable. Failure to 
heed the rules can cost a company its business licenses or trigger other 
penalties. Companies can also be required to turn over information on users 
suspected of having broken China's wide-ranging, but often vague, laws.

"We are all very aware that entering China requires us to balance two specific 
needs: the needs of our users and the need of operating within a political 
climate and a set of government regulations, as we do elsewhere in the world," 
says Sukhinder Singh Cassidy, Google's vice president for Asia-Pacific and 
Latin America operations. She says Google believes it can maintain that balance 
as it expands in China, saying its approach will be one that "really provides 
as much information and transparency as we can to users."

Tricky Balance

The balance has already proved tricky. Until recently, Google's map and 
satellite-photo service offered Chinese Internet users something they rarely 
could see: a bird's-eye view of the secret compound of Zhongnanhai, where the 
country's top leaders live and work.

But in recent weeks, close-up views from Google's satellite images of the 
leadership compound in Beijing have been blocked in at least parts of China. 
It's not clear how widespread the blocking is, or whether the government is 
behind it. Google says it didn't alter that part of its service for Chinese 
users. In any case, the feat betrays a high level of technical expertise.

Other big technology companies have drawn fire for accommodating the Chinese 
government. Cisco Systems Inc. has been criticized by free-speech advocates for 
selling China equipment that helps censors block Web sites. Cisco spokeswoman 
Penny Bruce says the company does not participate in government censorship but 
acknowledges standard Cisco equipment can be used to filter access to Web sites.

Human-rights activists in recent months have condemned Yahoo -- which has been 
in China since 1999 -- for helping Chinese police identify a Chinese journalist 
who allegedly used his Yahoo email account to relay to an overseas Web site the 
contents of a secret government order. The order related to coverage of a 
coming anniversary that was politically sensitive. The journalist, 37-year-old 
Shi Tao, is now serving a 10-year prison sentence.

Yahoo defends its actions. "We balance legal requirements against our strong 
belief that our active involvement in China contributes to the continued 
modernization of the country," it said in a statement.

Concerns about government restrictions helped Time Warner Inc. decide in 2002 
to abandon a planned joint venture with Chinese computer maker Legend Holdings 
Ltd. for its America Online division. Time Warner Chief Executive Richard 
Parsons has said publicly the company balked because of concerns that Chinese 
regulators would be able to demand copies of subscribers' emails and other 
documents.

Proponents of doing business in China point out that the Internet has already 
facilitated an unprecedented flow of information in the country -- statements 
critical of the government, for example, are easy to find online.

"There is a misunderstanding in the United States about the degree to which 
people can access information and say what they want to say in this country," 
says Mr. Lee, Google's president for China.

Google began providing a Chinese-language version of its search service in 
2000. Although the service soon attracted a sizable following in China, it was 
operated from the U.S. It wasn't until two years later that China really 
grabbed the company's attention.

In September 2002, Google's site was suddenly blocked in China, apparently by 
the government, and would-be users were directed to Chinese sites instead. The 
blocking took Google's executives by surprise. Co-founder Sergey Brin ordered 
half a dozen books on China shipped overnight to do a crash course on the 
country.

Google's service was finally reinstated two weeks later, for reasons that 
aren't entirely clear. Google says it didn't change anything about its service. 
But Chinese users soon found they couldn't access certain politically sensitive 
sites that appeared in their Google search results, suggesting that the 
government was censoring more aggressively.

By early 2004, Google's interest in China was building. "China is strategically 
important to Google," declared a January 2004 internal presentation, disclosed 
as part of the Microsoft lawsuit.

But company executives continued to grapple with how to establish a local 
operation in China without compromising their mission, according to the 
internal documents and people familiar with the matter. They consulted 
organizations, business partners and experts such as Xiao Qiang, a Chinese 
Internet scholar at the University of California at Berkeley. Mr. Xiao says 
that, despite reservations, he encouraged Google last year to set up shop in 
China because the Internet could help open up Chinese society.

Google had powerful reasons to eye big overseas markets like China. A majority 
of the searches it handles are for consumers outside the U.S. Yet Google's 
international advertising accounted for just 34% of its $3.2 billion in revenue 
last year.

Revenue flowing to search-engine companies in China is still relatively small 
but is growing rapidly. Research firm Shanghai iResearch Co. estimates Google 
had just $3.7 million in search-ad revenue in China last year, and says it 
ranked third in Chinese search traffic, after Baidu and the combined total for 
several sites run by Yahoo. Google doesn't disclose its Chinese traffic or 
revenue.

In June 2004, Google purchased a 2.6% stake in Baidu for $5 million. Google 
says it saw Baidu as an "investment opportunity." By the end of 2004, Baidu had 
become the most widely used search site in China, largely thanks to a marketing 
effort that emphasizes its local roots. Among other things, Baidu advertises 
that there are 38 different ways to say "I" in Chinese, saying "Chinese search 
is a complicated matter."

'Difficult Questions'

Still, Google's founders remained conflicted about China. Mr. Brin acknowledged 
as much in an interview published in August 2004 on the eve of Google's $1.7 
billion initial public offering. The interview, with Playboy magazine, was 
included in Google's IPO filings. Asked about choosing between censoring search 
results and being blocked from China, Mr. Brin responded: "There are difficult 
questions, difficult challenges. Sometimes the 'Don't be evil' policy leads to 
many discussions about what exactly is evil." He also criticized rival search 
engines that "have established local presences there and, as a price of doing 
so, offer severely restricted information."

Shortly after that, Google launched a version of its news service, which allows 
Chinese users to search news Web sites. In its results pages for Chinese 
consumers, the company excluded articles from sources the government deemed 
subversive -- a practice that continues today. Google argues that it would be 
frustrating to give people links they can't access anyway.

Mr. Xiao describes it as "a very awkward way to say, 'I play by the Chinese 
rules.' " Google's regular searches in China do turn up links to sites that are 
blocked by the government.

In October 2004, Google's co-founders, Mr. Brin and Larry Page, traveled to 
China to talk to executives of local Internet companies. In a confidential 
presentation that same month, titled "China Entry Plan," Google executives 
outlined government censorship rules and suggested offering free advertising on 
Google's sites to Chinese government agencies as one possible strategy for 
building goodwill. The presentation, disclosed as part of the court proceedings 
in the Microsoft case, mentions giving users explanations when their searches 
are restricted. That would be a new step toward full disclosure in China, 
although it's unclear whether the government would allow it.

Last Dec. 23, Google executives presented another confidential "China Launch 
Update," which laid out strategic objectives including giving Chinese users 
access to the "greatest amount of information possible." The presentation, 
which is included in the court documents, listed a series of target dates for 
the company's China business, including launching a China sales-operations 
center by the summer of 2005. Google provided the internal China strategy 
documents because they are potentially relevant to Microsoft's allegations, 
which include that Mr. Lee's work for Google in China is directly competitive 
with what he did at Microsoft.

Lost Ground

This past summer, Google executives were still fretting about having lost 
ground to competitors. At a July 15 board meeting, Mr. Schmidt, Google's chief 
executive, listed China as his top "Lowlight/Serious Concern," citing the local 
competition, according to an internal document disclosed as part of the 
Microsoft suit.

Google declined to make Mr. Brin, Mr. Page or Mr. Schmidt available for an 
interview for this article.

Ms. Singh Cassidy presented slides summarizing Google research that concluded 
that "people don't know much about us" and "over 50% [of] users who know/heard 
about Google can't spell Google correctly."

Whatever concerns top Google executives had about competition, by the July 
meeting they had apparently worked through their moral dilemma over whether to 
expand in China -- and decided to do so aggressively. Four days after the 
meeting, Google announced the hiring of Mr. Lee, with a compensation package 
valued at more than $10 million over four years. Born in Taiwan to mainland 
Chinese parents and raised partly in the U.S., Mr. Lee founded and ran 
Microsoft's Chinese research laboratory in the late 1990s. He enjoys nearly 
rock-star status among the country's technology enthusiasts.

Since his hiring, Mr. Lee has been recruiting heavily and giving speeches to 
large crowds of university students. Over the past several weeks, he says he 
has spoken to some 60,000 students. Mr. Lee says he wants to recruit leading 
young Chinese scientists to build a team that will be integral to Google's 
global R&D operations. So far, he says, Google has been able to "create 
instantaneous momentum" in China, he says.

Google now has offices in Beijing and Shanghai. The recruiting portion of its 
Chinese-language Web site currently lists more than 30 China-based positions, 
including a lead recruiter. Mr. Lee says he also hopes to hire five executive 
chefs, one for each major style of Chinese cuisine, and one to cook Western 
food.

Google plans a marketing blitz surrounding the launch of its Chinese ".cn" 
site, according to the court documents. Adding .cn would establish Google as a 
Chinese site and tie its brand to a domain name that is regulated by Chinese 
authorities. Google has also planned to introduce a new Chinese-language brand 
name, as Yahoo and others have done, although those plans aren't finalized, 
according to a person familiar with the matter.

--Cui Rong in Beijing contributed to this article.


=======================================

December 16, 2005
ASIALINKS DAILY VIEW
Google Meets China

By FREDERICK KEMPE
THE WALL STREET JOURNAL
December 16, 2005

The world's biggest search company has a giant dilemma on its hands as it 
tackles the world's most populous country. How does it implement its ethos of 
making information universally accessible in a country whose government 
believes the Internet must be tightly controlled?

Google had no physical presence in China before this year. While on the 
sidelines, Baidu.com became the country's most popular search engine. So Google 
is in an uphill battle that may force it to make compromises. For example, it 
tailors its Chinese news service to omit sources that Chinese censors block.

But will it also censor Google Earth? The user at the moment can zoom in on the 
party leadership compound of Zhongnanhai in Beijing and see forbidden images 
from a bird's eye view.

For now, tech companies are compromising principle to get deals in China. 
Ultimately, one hopes, the knowledge era will transform official Chinese 
thinking.

http://online.wsj.com/article/SB113468633674723824.html1

Related link:
http://earth.google.com/2

ABOUT FRED KEMPE


Frederick Kempe, an assistant managing editor of The Wall Street Journal, has 
spent his career tracking global political, economic and business issues. Until 
recently, he was the editor and associate publisher of the Wall Street Journal 
Europe. As a correspondent he covered stories including the rise of Solidarity 
in Poland, the unification of Germany and the collapse of the Soviet Union, and 
he reported on wars in Afghanistan, Iraq and Lebanon. He is the author of three 
books: "Father/Land, a Personal Search for the New Germany," "Siberian Odyssey, 
a Voyage into the Russian Soul" and "Divorcing the Dictator: America's Sordid 
Affair With Noriega." He is a graduate of University of Utah and Columbia 
University. Write to Frederick Kempe at fred.kempe@xxxxxxxxxx





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