Google search of some politically sensitive terms are directed to local ISP

To control the information owing over the Internet, the MPS has installed, not rewalls exactly, But a content ltering system that works similarly to parental control systems that can block out specic material. A story in The New York Times Magazine describes the system this way: There are three main ber-optic pipelines in China, giant underground cables that provide Internet Access for the public and connect China to the rest of the Internet outside its borders. The Chinese Government requires the private-sector companies that run these ber-optic networks to specially Congure router switches at the edge of the network, where signals cross into foreign countries. These routers some of which are made by Cisco Systems, an American rm serve as Chinas New censors. Once the rewalls checks to see if the sites being searched are blacklisted or not, it next utilizes a censorship system that uses a keyword blacklist and routers that reach deep into Internet traffic to nd forbidden words or phrases on the sites being searched. This, combined with the fact that those in China know that all of their Internet activities are being monitored, instills fear of imprisonment and limits the inux of information that the Chinese government nds objectionable. In the fall of 2002, problems struck. Suddenly, in early September, computer users in China could not access Google.com. The Chinese government had blocked access to the site, and users were instead diverted to rival Chinese search sites. Two weeks later, it again became possible to access Google.com, but government censorship had been heightened, making the search engine far slower and less reliable. Google appears to be down around 10% of the time. Even when users can reach it, the website is slow, and sometimes produces results that when clicked on, stall out the user's browser. Our Google News service is never available; Google Images is accessible only half the time

Competition from Baidu

As we all know, Chinas most popular search engine isnt Google, its Baidu. Baidu was created in 2000 and at the beginning of 2010 it has about two-thirds of the Chinese market. It claims to be the most advanced Chinese-language search engine. Baidu is the largest Chinese language search engines. Baidus mission is to provide the best way for people to find information online, including Chinese language web pages, news, images and multimedia files though links provided on their website. In addition to serving individual Internet search users, Baidu also provides a platform for businesses to reach potential customers online. Chinese government emphasized the fact that Google represents the Western Culture and played it strongly against it. The main Chinese tabloid (www.huanqiu.com ) editorial cited online surveys showing 80% of respondents who said they could not care less if Google withdrew from China, the worlds largest Internet market with an estimated 420 million users. Downloading free MP3 files This is one of the most popular online activities in China and Baidu became the primary vehicle to locate and download free MP3 files, which generates huge amount of traffic. Choosing Baidu for average Chinese person was obvious. Baidu is now the third largest search site in the world and its nipping at Yahoos heels to become number two. Yahoo had 8.9 billion searches in July of 2009; Baidu had 8 billion. Thats more than double the number four player, Microsoft, which had just 3.3 billion searches worldwide. For the record, Google is still light-years ahead of everyone with 76.7 billion searches. But that doesnt mean it doesnt view Baidu as a global threat.

Presence of major U.S. competitors

Googles major U.S. competitors, Yahoo! and Microsoft MSN, had each entered the Chinese market as ISPs years earlier, agreeing to self-censor. They were doing business in complete tandem with government authorities. Yahoo was once accused of providing an email id of a journalist on request of government authorities sub sequentially the journalist was sent to jail. Chinese government wants to control what information flows into China and when someone who wishes to set up or to use the Internet, according to Chinese Internet policy needs prior approval from the government. Chinese users have to sign an agreement not to access any information that threatens government security. In addition, according to the Computer Information Network and Internet Security Protection and Management Regulations passed by State Council in December 1997, the policies require that all Internet service providers (ISPs) will pass along

Internet users personal detailed information to the state-owned China Internet Network Information Centre. Due to the acceptance of Chinese regulations by yahoo and Microsoft, Google was also expected to give into the government demands.

Access, transparency, and trust, are the principles that guide the company
The companys motto is Dont Be Evil, and prior to entering China, Google had successfully set itself apart from other technology giants, becoming a company trusted by millions of users to protect and store their personal information. The choice to accept self-censorship, and the discussion and debate generated by this choice, forced Google to re-examine itself as a company and forced the international community to reconsider the implications of censorship. Access-Googles principle of providing information to all at all times was violated when Google accepted the Chinese demand of providing filtered information in early 2006.they were now providing only the information which the government allowed them to. Trust and transparency-An internet giant like Google which was a symbol of trust and transparency was now providing filtered information, Google couldnt protect the privacy of many of the Chinese human right activist when their Gmail account was hacked and the source of the attack originated from China.

Low revenue share

Google stands to lose a relatively small market share in China and whatever profits associated with that today. In the long run, the losses could be much, much larger given the size of the market and given the intrinsic appeal of Google.JP Morgan estimates that

Google was set to make $600 million in revenue in China this year. That number seems excessive, considering that Baidu which dominates the Chinese search marketis expected to bring in only $900 million in revenue. But even if JP Morgans estimate is correct, it only represents just over two percent of the $26 billion in revenue that most analysts expect Google to post this year.

Google is global
China is deliberately slowing down access to Googles services. Gmail users in China say the service has been slower. Sometimes weve been unable to connect, and many times unable to use Gchat. A global computer hacking effort: Chinas Politburo directed the intrusion into Googles computer systems in that country, a Chinese contact told the American Embassy in Beijing in January, one cable reported. The Google hacking was part of a coordinated campaign of computer sabotage carried out by government operatives, private security experts and Internet outlaws recruited by the Chinese government. They have broken into American government computers and those of Western allies, the Dalai Lama and American businesses since 2002, cables said. (source:wikileaks) If Google is hacked in China it will create a sense of fear and mistrust among consumers in other countries. It will create an impression that their accounts may also be vulnerable of being hacked. So Google being hacked in China also creates a bad image for Google worldwide.