Google Vs. Chinese Goverment

Google and China

What had changed in Google and Chinese government’s respective environments between the initial 2006 agreement and the relicensing in 2010?

* Chinese government’s environment: the China’s 11th Five-year plan was outlined in 2006 and set objectives for the period 2006-2010. It increased the proportion of service industry, raised income levels of Chinese people, and improved public services and development. Table 1: annual growth rate of 30.3% concerning Internet users between 2005 and 2010. Exhibit 3: In 2006, China has the second highest rate of World Internet users after the US. In 2010, it has the first one.

Therefore, between 2006 and 2010, the Chinese market economy system has been improved, allowing the government to regulate both market and social administration even more.

* Google’s environment: despite the 2008 crisis, Google’s stock price remained incredible. The firm became more and more international; its revenues from outside of the US had grown to 53%. The quantity and variety of products it offered increased. In 2007, it offered free Gmail accounts to Chinese customers and in 2008, it offered its Android mobile operating system. Exhibit 4: Between 2006 and 2009, Google’s total revenues went from 10605 to 23651 millions of dollars, and its revenues from the rest of the world went from 28 to 40%. Exhibit 5: Between 2006 and 2010, Google’s list of services drastically increased.

Therefore the changes in Google’s environment consisted in more and more success and therefore power and global influence.

Why did Google go public in January 2010 about the cyber attacks?

By going public about the cyber attacks, Google wanted to force Chinese government to react, by denouncing its surveillance and jeopardizing its reputation alongside Chinese people. It tried to impact China’s political stability.

What were the risks of employing this strategy?

Google took the risk to deteriorate its relations with the government, and its partners.

* Concerning China Unicom: when Google redirected Google.cn search requests to its search site in Hong Kong, which was not censored, this entailed the suppression of preloaded Google services form China Unicom – Google’s phone partner - phones.

* Concerning the Chinese government: a bad relationship could have forced Google to exit the Chinese market, which would have been harmful considering China has the highest rate of world Internet users (Exhibit 3).

What are the implications of the negotiations for other web technology companies?