The recent blog by David Drummond, chief legal officer at Google, proves that the company’s leadership learned little from their move to China in 2006.
China is a complicated market, more so with the media industry. The Communist Central Party (CCP) retains far more control over media, the press, and the internet than any other economy at a similarly-developed level. Internet companies must carefully consider how to enter China so they do not get forced into releasing personal account information.
Google took a long, hard look at the plight of Yahoo! in China. When it entered the country, Google kept its gmail and gchat services off of servers located in China. Because personal account information was stored on servers outside of China, Google was safe from being forced to turn over sensitive information.
Google made two broad errors since entering China: failing to assess its target consumer and reacting with ultimatums to the recent hacker attack.
When it entered China in 2006, Google tried to fight the CCP at every step, announcing that it was fighting for the rights of the common Chinese consumer. When taken from a western perspective these actions are honorable. But the Chinese are just as nationalistic and proud of their country as the US. They are not inclined to demand their rights from the government entity that brought them out of the Cultural Revolution and provided them with over 9.3% GDP growth for 15 years.
China comes from a cultural base that is collective, Confucian, and non-rebellious. Its perspective on freedom of speech and freedom of property varies from ours in that it assigns to these issues a lower level of importance. Google went into China espousing American values that did not translate well. As Kai-Fu Lee, former head of Google China, was quoted as saying, “The Chinese internet is different from the US and European internet. If you don’t listen humbly to your customers and pay close attention to the subtle differences you will fail…That is why, generally, US internet companies have, with the exception of Google, failed in China” (Neate, 2010). While Kai-Fu Lee seems to feel Google has listened to the consumer’s needs, I feel that Kai-Fu Lee’s departure from Google shows in part that it did not.
Additionally, Google’s ultimatum blog posting represents a major failure to grasp opportunity. Had it understood Chinese history, it would know to play the victim in this case. Take the Chinese classic “The Three Kingdoms” for example. Every Chinese businessperson reads this novel as a strategic guide to business. In it, a master strategist named Zhuge Liang finds his army stuck on a river bank awaiting an attack the next morning. They know they don’t have enough arrows to repel the enemy that will cross the river in the morning. So Zhuge Liang has his army build and dress straw mannequins and place them in boats. They then float the boats across the river with ropes and swimming soldiers. The enemy, fearing a pre-emptive attack, fires arrows that stick in the mannequins. The boats are pulled back and the next day Zhuge’s army uses the enemy’s own arrows to repel their attack, decimating the enemy in the process.
Stories like these are what Google should have read to gain an understanding of Chinese culture and history. Had it approached this situation with a more humble form of outrage, Google would have gained negotiating leverage and respect in a country where the government is not known to give it. It could have used the arrows from the ineffective attack as ammunition to fire back at the CCP.
Cited Works:
Neate, Rupert. “The former Google boss creating China’s answer to Silicon Valley”. The Daily Telegraph. London (UK). Mar. 12, 2010. Pg. 4.
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