As the Chinese government holds steady, Google sees no other way out of its current predicament. Analysts are shaking their heads and everyone is taking sides. It doesn't matter what Google wants to do, Chinese law is not going to change the way Google thinks it should. There is no influence regionally or globally that Google can bring to the table influencing change. Google does very well in Russia, an important ally and trading partner to China. Did the executives of Google get any advice from the Russian government? If they did, it's evident they didn't follow it.
The U.S. State department can saber-rattle on behalf of Google all it wants; it will not change the outcome. Reuters reports that the U.S. Senate has created an Internet Freedom Caucus to be lead by Senator Ted Kaufman aimed specifically at Iran and China. It won't influence current events. China is moving toward an international and diverse global economy based on free trade and treaty agreements. The pace is not even at dial up internet speed, think 2400 baud instead. Google is not a priority for the Chinese government to deal with. In fact it is puzzled by Google's actions. It has other important challenges, importation of energy supplies, currency issues, protecting its US treasuries and industrial and service trade routes. Google is not that important to the country, except to be an annoyance and be a negative effect on the country, potentially destabilizing it. Robert Gibbs, White House Press Secretary, was asked if President Obama was briefed on Google's decision. Gibbs responded that President Obama was aware of what may occur over the weekend.
If Google stays - it will have to abide by Chinese law - so get a grip and move on. In doing so, it would be prudent to remove services like email and any application requiring identity information. That doesn't leave much except its search engine business - which implies going back on its public statement with respects to its censorship. For now it has redirected its search engine to its Hong Kong website. It won't work.
If Google leaves - it will not be the end of the world. Yes, it's a big market with consumers that have money to spend. Other giants have come and gone, Wal-Mart being one of them. Google could always come back as reforms occur within government. It's stated on its official U.S. blog that it will leave Sales and R&D in place. More than likely it is simply the first step, to placate the Chinese Government's demand to have an orderly winding up of operations.
Chinese market space
Google, Yahoo, IBM, Microsoft, GM, Ford, and several others risked international criticism entering the Chinese market. Export of its products at lower cost was a fraction of the reason these companies have entrenched themselves into the country. Entering the biggest consumer market in the world is a bigger prize than exports - by fairly wide margin. The industrial companies have fared well, so why are some high tech firms frustrated?
- Youthful leadership hurt its management relationship with the government.
- International commerce and internet business models, ideas and concepts are not a one size fits all. Visions that work in a closed and socialist countries have not fully adapted to 'western concepts'.
- Failed to heed history. The company decided it could risk forgetting lessons learned from the past and simply try creating new history. Recent black eye experiences such as Yahoo, Microsoft and other high tech companies did not influence how Google should approach the Chinese government.
- Software and Intellectual services are threats to indigenous political institutions. Manufacture and assembly of cars, computers, cell phones and every other widget and gizmo are not threats.
- During the cold war, the latest high technology products were stolen or received through defection by the other side. Think MIG-25's, computer chips, and the atom bomb. Any device that can advance the power of an institution. In the post cold war era; the government will invite your company into the country with the red carpet awaiting you - literately.
Patent and intellectual property law will eventually be understood, recognized and enforced in China. Just not right now. It will not be a component of its foreign policy that is meaningful or acted upon consistently for the next several years. Microsoft for decades has been battling piracy issues in China and has barely made a dent. Microsoft has not complained to the point of leaving the Chinese market. Most analysts know why - long term vision. Microsoft knows that over the next 50 years it wants to be the dominant operating system and software brand in the country and there are signs that strategy is already paying dividends for the company. Google tried to change the culture and enforce its own long term strategy in significantly shorter time frames and believed it could do so publicly threatening the government. Oops.
Google will survive the experience regardless if it stays or leaves. For now it has decided to attempt keeping one foot on each side of China's territories. China will likely not accept such a solution and will be forced either to comply to national law - or leave. If it tries to stay, management will need to wake up and adhere to the rules and culture of a "made in China" Google experience. It's not rocket science. Google has to be careful or China may wind up banning the company completely. Searching Google's mistakes in a couple of years maybe something even Google will want censored.