In most criticisms of Google’s decision to censor its newly launched China portal, it’s assumed that the company is sacrificing its ethics for the huge China market. That’s not quite true, it is sacrificing them for the potential of China’s market.

Bill Bishop crunches the numbers.:

I am guessing that Google will be happy if they can generate $30M in revenue in China in 2006. Baidu, the market leader, is projected to generate somewhere between $65-70M in revenue in 2006. I believe Google is expected to generate over $8B in revenue worldwide in 2006. If my math is anywhere in the ballpark, China will account for LESS THAN 2 DAYS of Google’s 2006 revenue. And given the economics of the keyword value chain in China, that revenue should be significantly lower margin revenue than is US revenue. So if the China business went away, would investors care?

No question there is value in setting up an R&D center in China; China has some of the best engineers in the world, and Google can probably hire anyone they set their sights on.

But does the China business really matter for Google, and will it ever? And is it worth the potential damage they may be doing to their brand, deserved or not (I believe not), over their decisions regarding Google.cn?

As long as access to the US-hosted site is maintained in China, the fact that Google has a portal on this side of the Pacific is of little relevance. China-based users can opt to select the non-censored site. Google is not redirecting China users to Google.cn. Jeremy’s view at Danwei is worth reading.

Still, I fear the establishment of the China site could prove to be an immensely boneheaded move by the company.

In spite of being hosted outside of China, Google was consistently highly rated by local internet users. Barring being blocked by authorities, It would have likely continued to be. Remember, Google was previously blocked in China, and the block was removed in part because users objected.

Google could have gained market share in the country simply by doing what it does well - offering great search functions and developing new ones. Instead, it’s facing calls for a boycott, the dumping of stock, the certainty of increased Congressional scrutiny and possibly regulation.

Richard at Peking Duck notes this theme occurring in two separate news items. From :

And filtering in general would also hurt Google more than its competitors. The Google brand is built on the notion that the engine gives users the clearest picture of the Web, without playing favorites. Restricting content in any way could hurt Google’s carefully burnished image, its 60% market share for search queries and its share price.

And from the Guardian.:

Whether Google might have done better in the long run commercially by keeping to the high moral ground at a time of rapid change in China will now not be known. It has an approach that is more ethical than most, but the multitude of enthusiasts will find it hard to reconcile its mission to provide all information to everyone when there are exceptions for words such as "democracy". It is easy to see why Google is doing this. This does not alter the fact that, sadly and in a significant way, it is not the same company today that it was yesterday.

UPDATE: It seems about the launch of Google’s "special" China service (as Xinhua had described it). So, the low-key launch of the China service has caused a backlash not only in the US, but also in China. Smooth move.
Worse, as Rebecca notes by translating a post, the rumor is that Google will start redirecting traffic to Google.cn. If that happens, my conclusion about the company may shift from ‘Dumb-Ass’ to ‘Evil.’

But I have heard some terrible news, which I cannot verify:
In the future, for mainland users, only the Eunuch version will be
available. If you type in www.google.com, the system will automatically
switch you to www.google.cn

That will be terrible. If Google does this, it will be dammed. This
company that self-claims "don’t do evil" will become the son of Satan
completely. It will not only be condemned by global users, but will
also be marginalized in China.

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