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Google vs. China: Google draws line at censorship in prize market

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“The Internet in China is a police state just like China is a police state,” she adds. “Google’s presence helped to legitimize and normalize censorship, and to their credit they seem to be re-thinking this.”

‘Don’t be evil’

When it launched its Chinese arm in 2006, Google agreed to abide by Chinese law on the grounds that its services did more good than harm. But the company’s founders never seemed comfortable with the arrangement, which appeared to undermine their motto, “Don’t be evil.”

The cyberattacks on their software, which Google implied came from official Chinese sources, “was the last straw,” says Danny Sullivan, who runs Search Engine Land, a website devoted to reporting on search-engine companies, based in California. “They got incredibly frustrated with China and got fed up,” he suggests.

Google’s closure threat highlights how “we are going to have a Balkanized network with different rules in different places,” says Professor Palfrey. An ongoing study of 70 countries shows “a clear trend toward more Internet censorship and more controls at national borders,” he says.

“Companies like Google are going to have to deal with that, but Google is saying there is a limit,” Palfrey adds. “It is a very important concept that there may be such a limit.”

Damage to future earnings?

Though Google said Tuesday its business in China is “immaterial” to its estimated $22 billion annual revenues, turning its back on the world’s biggest Internet market could seriously compromise the company’s future earnings.

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