Yahoo's Delicate Dance in Vietnam

The portal is expanding in the Asian country but is taking pains to avoid being drawn into government efforts to curb citizens' use of the Web

By Douglas MacMillan

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Internet titan Yahoo! (YHOO) is girding for growth in Vietnam. But as it expands in the Southeast Asian country, it's taking steps to avoid becoming an accomplice to government efforts to restrict citizens' use of the Web there.

Vietnam is among emerging markets that represent expansion prospects for Yahoo. More than 95% of the country's 18 million Internet users have Yahoo instant messaging and e-mail, according to a study conducted with researcher TNS. Yahoo is helping to fund Internet cafés in parts of Ho Chi Minh City and elsewhere. And the popularity of its blogging platform prompted the launch of a Vietnamese-language version, Yahoo 360plus, in May 2008.

Yet Yahoo's expansion comes just as Vietnam calls for tighter restrictions on citizens' online activities. Last fall the government created the Administration Agency for Radio, Television & Electronics, a unit charged with keeping watch of the Internet, and issued a federal edict that raised the penalty for criticism of the government posted to the Web. According to Paris-based human rights group Reporters Without Borders, the rules also carry an implicit request for Internet service providers such as Yahoo to provide data and reports on users.

"Enemies" of the Internet

In a March report, Reporters Without Borders included Vietnam on its annual list of countries it considers "enemies" of the Internet. The group cited the 30 "cyber dissidents" Vietnam has jailed since 2002—seven of whom remain behind bars—and criticized Do Quy Doan, the country's Deputy Minister for Information & Communications, for a statement he made in February that "a blog is a personal news page. If a blogger uses it for general news like the press, he is breaking the law and will be punished." Vietnam's Ministry of Information & Communications did not respond to a request for comment.

Yahoo's response to the government's stance on citizens' Web use reveals the tightrope Internet companies must walk when they do business in countries that may be viewed as intolerant of free online speech and government criticism on the Web. Companies that run afoul of government rules risk having operations curtailed, if not shut down. Those that comply with restrictive government agencies are lambasted by free speech and human rights advocates.

Yahoo's Chinese operations have come under criticism for providing information to authorities in 2004 that critics say led to a 10-year prison sentence for journalist Shi Tao. China Yahoo is operated by Alibaba.com, minority-owned by Yahoo. "We've learned tough lessons as pioneers in the emerging markets, and we've also taken that and tried to be a leader in business and human rights," says Michael Samway, vice-president and deputy general counsel of Yahoo.

Vietnamese authorities have not contacted Yahoo to ask it to cooperate with the new standards, Yahoo says. Indeed, the fine print may excuse non-Vietnamese companies altogether. "We haven't yet seen action steps from the government suggesting they intend to apply these regulations to foreign Internet companies," Samway says. Still, the company is taking steps it hopes will help it avoid having to comply with rules it considers restrictive. For one, Yahoo located the servers for its Vietnamese-language services in Singapore.

Jailed Vietnamese Blogger

In April 2008, Vietnamese authorities arrested politically outspoken blogger Nguyen Hoang Hai, who was charged with tax evasion. Human rights groups say the arrest was meant to put a chill on other online criticism of the government.

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