Gates on Google
We were all curious on the new tenant. Only the affluent can afford this prime real estate. Yet this new company was clearly beyond the most affluent of us. They leased the whole building, gutted the entire interior, brought in office furniture from the US (this is China, they make stuff here), and devoted an entire floor to a gym and a cafeteria (there is a gym not 100 meters away and the area is teeming with great cheap restaurants). In addition, they installed a neon sign on the top, something we all wanted but couldn’t for years. Flaunting their wealth and influence, who were they?
The sign eventually came up, bright and colorful. It said, “Google.” That was 2006.
Soon, we met them in social settings. Over a dinner, one casually mentioned that he risked being arrested coming to work everyday. “Why would you want to do it here then?” we wondered. Most MNC (Multi-National Corporation) had the policy of obeying all local laws. “Well, we don’t feel their laws are right.” His answer stunned the whole table. We changed the topic and moved on, wondering how long would they last in this jungle. Whatever Google’s objections are today, they knew all about them in 2006. Dr. Li KaiFu’s entrance was spectacular then. Their flamboyant protest is an admission of an equally spetacular business failure.
There have been many books, blogs, war stories, and urban legends on how western companies flamed up in China. They came with superiority, righteousness, and money; they expected to conquer quickly, like how they did in the Opium War. Anything different will be ridiculous, stupid, wrong, and must be changed. In a couple of years, they would have closed down shops, fired everyone, desert their fixed assets, and went back home like the VietNam War. It is impossible, they said, to work with those abstruse Chinese. Why can’t they enforce good laws, abolish censorship, respect human rights, drive nicely, pollute less, float exchange rate, and speak English better? We cannot win because they did not play by the rules.
China, the largest Internet and mobile computing market in the world, is unlikely to hurt from Google’s exit from the country. Many will devour Google’s market share quickly, in search, email, or cell phone handset. This dominant giant in the rest of the world is a small player in China. They couldn’t comprehend or accept their inability to gain market share here. They had the superiority, talents, and money. They also have founders and senior management who insisted on playing by their rules, instead of adopting to China’s.
“One may or may not agree with the laws in China, but nearly all countries have some controversial laws or policies, including the United States,” Bill Gates said. “Now, if Google ever chooses to pull out of the United States, then I’d give them credit.”
one question for you, I know you are defending Chinese government from what I understand from your post, why would Chinese government block popular sites like youtube, facebook and twitter, among other many smaller websites (they block even my wife business web for real estate which has nothing to break their law)? I like to have a way to communicate with someone in China, but I can not simply? what Chinese government is soon afraid of? why good information has to stop at the front door of China?
@ciji, your email bounced back.
Remember how PRC won the war and the idea behind the famed cultural revolution? If there is one government that truly understand the power of the people, it will be China. After centuries of experiment, China （and actually everyone) knew that the only way to control billions of people is through religion, or religion-like structure and messaging.
They need their people to “believe” and every contradicting information weakens that foundation. They knew that your wife’s website will topple their church, but the accumulation of them all might. They, and correctly so, believed Chinese people might revolve hearing all those message from “the other church.”
I do not defend Chinese government on this. I have two points: Google used the political message to cover-up their business failure; all governments censor and cyber-attack, Chinese just do it blatantly.
> Google used the political message to cover-up their business
> failure; all governments censor and cyber-attack, Chinese just do it blatantly.
I agree with you on the first point, not just google (just a matter of time they got this point), yahoo, ebay, news corp (just name a few, anyone does media/online related business in china) were or will be all a failure in China. that is enough to tell something.
as for the second, we do not like big brother on our back, but the big brother in China does way too much, way beyond being reasonable, that makes huge difference from other big brothers I believe. I only can think of extremely lack of confidence in their hearts even though they have lots of power economically.
I have been doing personally quietly for over more than 10 years to collect all articles here and send to small number of friends in China, I truly believe everyone should have right to read the information and judge by themselves, not by the big brother. I will continue do so until the great firewall of China torn down like Berlin wall.
calling Google a “spectacular business failure” is pretty far off the base. This is a company that came out of Stanford in 1998 with nothing, and became a $100B (market capitalization) company within 10 years! Very few people in history can claim such achievement.
And honestly, most of that 0->$100B capitalization growth had nothing to do with China. It had to do with innovation (something that most MBAs or managers talk about, but actually cannot handle). I would not be surprised that google’s emphasis is more on innovation for the next $100B growth opportunity, as opposed to geography (like China) for growth. Technology isn’t like a commodity business (sugar water - aka Pepsi), you don’t need China to grow into a 100B business, you only need a great idea and a small group of smart people. If China distracts google too much from engaging in innovation and reinventing themselves, then pull out or risk missing the next opportunity…
As for Mr.Gates and Microsoft Co, they missed the boat on Internet services (ebay, yahoo, amazon in the 90’s), Search (google in 00’s), virtualization (vmware in 00’s), and consumer electronics (apple in 00’s). They’ll probably miss out more in the decade of 2010’s.
@ciji, a lot a lot of people in China can access youtube, twitter, facebook without problem or just with a little bit effort. When I traveled to company’s Beijing office, I got access to the whole internet through company VPN. Arguably, anyone cares to watch youtube can find ways to do so, and vpn equipments sell like hot cakes in China.
@shrek, somewhat I think selling sugar water like Pepsi is pretty high tech, google, like Coke and Pepsi, makes huge money by dominating the distribution channels. Study showed google’s search result is no better than yahoo or bing.
@shrek
Whatever reasons for Google’s successes, its profit comes from having accesses to population, not much different from sugar water or other commodities. I don’t see how pulling out of a 1.3 billions segment helping.
Sorry, the failure was in China. Right or wrong, it was spectacular.