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Beijing sends a message to Google


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February 21, 2006

Beijing sends a message to Google

Bruce Einhorn

Now it’s the Chinese government’s turn to beat up on Google. Earlier this month, the company got grilled in Washington by members of Congress for its willingness to censor its Chinese site in order to launch its operation in China. In response to concerns from U.S. lawmakers and free-speech advocates, Google has begun disclosing on its Chinese site that it has had to censor certain results.

Now China is hitting back. This week, the Chinese media (all controlled by the government) have criticized Google and reported that Beijing is investigating the company for operating the new Google China site without a proper license.

The folks at Google have rushed to deny that they have done anything wrong. http://news.xinhuanet.com/english/2006-02/22/content_4210365.htm

And it does seem that there’s little difference between what Google is doing(working with a Chinese owned local partner) and what other multinationals have done. But Google has publicly embarrassed the Chinese government, and the Chinese government doesn’t like to be publicly embarrassed.

It’s not unlike what happened last year to Dell. Last spring, the computer maker angered the Chinese after the emailed anti-Beijing comments of a Dell salesman in the U.S. found their way onto the Internet. Dell apologized profusely. But the Chinese government was not amused, and Dell sales in China took a major hit in the following quarter. Point made.

It’s easy for Beijing to send a message to a PC maker, since so many computer sales in China go to government offices, state-owned companies and government-controlled schools. Sending a message to Google will take a bit more work. But clearly the government is annoyed. Don’t be surprised if Google’s China operation encounters more difficulties in the weeks ahead.

11:39 PM

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A fascinating case history is clearly emerging. One interesting question is whether Yahoo -- also grilled by Congress -- will gain a tactical advantage. And, if so, what sort of message will this send the players in today's global economy?

Posted by: Hank at February 22, 2006 09:49 PM


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