Some Thoughts on Google's China Action

The blog post announcing Google's possible/likely retreat from the Chinese market due to cyber attacks on its systems has a number of repercussions on other technology companies doing business within China.  Specifically, Microsoft and Yahoo will be forced to make some statement justifying their continued Chinese operations or follow suit.  Neither Google, Microsoft, or Yahoo had much of a presence in the search market dominated by the local provider, Baidu.  Microsoft could justify engagement because it sells software to Chinese customers beyond the search product.  Yahoo's presence is similar to Google in that it provides search and other account based services such as email, so the pressure is likely to bear on Yahoo more than Microsoft.

Congress held hearings in February 2006 excoriating executives from all three companies for cooperating in censorship on search results, and for turning over email and other account information on dissidents as part of state prosecutions.  The companies justified their activities as an example of following local laws in order to do business in China.  Better a limited presence than no presence, they said.  Committee members threatened legislation that would mandate non-cooperation by these firms, though once their ire passed, nothing came of it.  It seems that alleged Chinese government hackers accomplished something that Congress could not, which is for Google to say enough is enough.

The Google motto of "don't be evil" gets thrown back at the company in light of various antitrust investigations from different governments, the handling of the book settlement, and other business practices.  Google is a big, very rich company, so how can it abide by its motto an still compete?  Truth be told, Microsoft and Yahoo wishes they were Google.  Microsoft, certainly does because it tries to emulate Google's business model, and then gives up after nothing significant comes of its investments.  Yahoo would like some of the money Google makes in what once was Yahoo's core business, and the aura that it is a vibrant technology company as Google is now perceived to have.  It is possible to be big, competitive, and not be evil, or at least not indifferent to the evil around.  Chinese dissidents will certainly have something about which to cheer.  Congress might cheer as well.  No company has ever told the Chinese government to take their censorship and shove it.  It's time to hear from Microsoft, Yahoo, and the State Department.

In another note, the US-China Economic and Security Review Commission issued a report prepared by Northrup Grummon Corporation Information Systems called Capability of the People’s Republic of China to Conduct Cyber Warfare and Computer Network Exploitation.  It's a fairly detailed description of Chinese cyber capabilities as applied to war scenarios.  From the report's perspective, war includes cyber-probing potential enemies for network weaknesses as any war would include information warfare.  It also suggests that a good part of Chinese hacking attempts by third parties is for corporate and government information rather than credit card or financial information.  That type of material has more value and can be sold to governments.  The report is available here.  Hat tip to Ars Technica for highlighting it.  A links to it is in the the Official Google Blog post on their China action.  [MG]