Caroline Kulak 1

Case Study #3 Response

Overview
In the 2010 case study “Google in China”, scholars John Quelch and Katherine Jocz
delve into the complex relationship between one of America’s largest and most powerful tech
companies and a likewise influential international power, China. First establishing the tenets of
the company’s character, the piece reviews myriad historical incursions of Google on the
Chinese Market, raising questions of creative capital, censorship, and corporate/government
conflict still salient at this very moment. Through review of this 8 year-old case study, the
contemporary global business scholar is rewarded with powerful insight into an ongoing conflict
of wills at the highest level of industry and country.
The Google Identity
The first section of this piece ascertains as foundation the principles of Google’s philosophy,
thus demonstrating what makes their business so successful and worthy of study. In the early
years, “the company attracted users quickly by making Internet searches simple, quick, effective,
and unbiased”. Here Google’s explicit stress on efficacy casts their product, the search engine, as
a tool. Google’s search engine is intended, like an electric drill, to ameliorate the process of
research through a removal of the barriers of time (“quick”) and energy expenditure (“simple”).
This phenomenon, the “tool-attitude” about their product, continued beyond their domestic
operations into their forays in China. Note also, the emphasis on “unbiased” results, which is key
to understanding the later developments in the conflict with the Chinese Government over
censorship. Equally essential is Google’s practice of “display[ing] search results in order of
calculated relevance to users rather than in order of advertising payments”. This strategy
cultivated a novel user-first, quantitative truth-first public identity. The company’s succinct ethos
of “Do No Evil” also contributed to the establishment of a positive, ‘bettering’ public image.
Combined, these (and other) qualities separated Google from the pack of dot com startups, and
lead to its eventual “domin[ance] in search”.
“All the World’s Books Online”: Missteps in the Universal Library
An early incursion of Google’s on wrong side of Chinese law was the situation surrounding
Google’s attempt to build a complete digitized online library, “mak[ing] available 15 million
volumes within a decade”. This goal, though perfectly aligned with the company culture of
increasing accessibility, ran up against the obstacle of copyright. In addition to lawsuits from
American, German, and French authors, “Chinese author Mian Mian sued Google for copyright
infringement” and “the China Written Works Copyright society . . . accused Google of failing to
inform or pay authors of books it was digitizing”. It could be argued that Google communicated
vast disrespect for Chinese cultural capital, and a willingness to step on the interests of Chinese
creative and media makers, as well as citizens more generally, in order to achieve the goal of a
digitized universal library. This early case is instructive in the central question it raises: How far
is Google willing to go to assert its interests in China?
Building Chinese Presence
After the introduction “its china-based website, google.cn” in 2006, Google began to accrue a
chinese workforce that by 2009 numbered in the several hundreds. By relying on a subset of
 Caroline Kulak 2
Case Study #3 Response

employees living and working among the Chinese, Google upped it’s ability to produce a
google.cn that was able attract the Chinese user. Google’s major roadblock in the acquisition of
said user, was and is Baidu, “a Chinese-owned search engine company . . . which, like Google,
derived its revenues primarily from keyword advertising”. Unlike Google, Baidu was “reputed
to cooperate in blocking websites and censoring searches on sensitive topics” and “provided
consumers with free links to download pirated music and entertainment from Chinese Web
sites”. Both the cooperation with the government, which prevented network speed choking issues
like those faced by Google, and this incentivizing offer of free media tempted the majority of
Chinese consumers to use Baidu instead. However, even with Baidu’s immense advantages,
Google still managed to amass a 31% market share, significant given their role as foreign
insurgent and their combative relationship with the local government. This impressive share
came under threat as the company moved to offer the Chinese government an ultimatum on
censorship, a controversial move both critiqued and lauded by prominent business and
government minds.
The Importance of the Chinese Market
Beyond its size and Hal Sirkin’s simple observation that “there’s money to be made”,
what motivated (and motivates) Google to get involved in the Chinese market, especially with a
company like Baidu basking in home-court advantage? The answer lies in China’s documented
ongoing and projected growth. As quoted in the article, author Fareed Zakaria notes “its
[China’s] exports to non-Western countries are now significant; it has vast capital surpluses”.
This is in stark contrast to the extraordinarily mature US market, which was/is arguably stagnant.
To make a play at greater profits than they could find at home, Google intentionally cultivates its
presence, even through simple “engagement”, in “one of the fastest-growing economies in the
world”.
Conclusion
In summation, Quelch and Jocz’s case study reveals the precariousness of Google’s
ongoing foray into the Chinese market. Constantly facing what could be construed as a conflict
of interest in the form of search result censorship, Google continuously walks the line in the
attempt to maintain their “do no evil” ethos and capitulating to the Chinese government’s
demands in pursuit of profit. Facing the threats of competing search engine Baidu and
government cyber warfare like connection throttling and the alleged 2010 hack, Google still
managed to establish a significant presence in the Chinese market. The tale of Google’s relative
success against long odds is instructive in revealing the difficult sort of quandary a company can
face as they converge on a foreign power. In the case of Google, its saga of American Company
in the face of the Chinese Government is still developing; business scholars the world over watch
raptly to see where it goes next.
Extra Credit – What is Google’s Position in China Today?
 In august of this year, Farhad Manjoo wrote in the NYTimes “Google took on China, and
Google lost” This editorial reported on Google’s supposed regret about their withdrawal
form the Chinese market as a result of the 2010 post-hack censorship ultimatum
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Case Study #3 Response

 Over the summer, Google’s Project Dragonfly, a potential future censored Chinese search
engine caused a big media stir and drew negative attention from human and digital rights
activists
 In Google’s absence the Chinese internet population has increased by almost 70%, and
there is some question about whether users could be tempted away from Baidu again, and
whether they’d truly see an American search engine as an improvement
 Despite criticisms it appears Google is moving forward with the re-entry project, even as
a major Google research scientist Jack Poulson resigned over “forfeiture of our values”
 A final version of this Dragonfly search engine could launch as early as next year