After Google’s investigations reveal hacking attempts into e-mail accounts of Chinese human rights activists, the U.S. search engine giant claimed to have approached other companies in a bid to launch a massive protest against the Chinese government. However, lady luck wasn’t on its side. Bloomberg reported that Google was discontented by their reluctance to come forward, according to a person familiar with the matter.
Apparently, Google isn’t the only company who was affected by the “highly sophisticated and targeted” cyber attack originating in China in mid-December last year, which had resulted the Internet company in the loss unspecified intellectual property and the breach of two e-mail accounts. The unnamed source stated that at least 20 other large companies were targeted too and believed that the attack was state-sponsored. Google tried to rally support from them and these companies to talk about the incident, hoping to speculate the incident. Among the companies affected include Adobe Systems, Juniper Networks, Rackspace Hosting, and Yahoo.
The main reason behind their reluctance was because they didn’t want the cyber attack to affect their businesses in mainland China, which is currently the third-largest economy. If they were to join forces with Google to condemn the cyber attack, it may significantly destroy their brand in China and lose a potential 1.3 billion customers.
Although many may think that it’s insane for Google to leave the country, but the California-based company can actually afford to do so. Google.cn generated about $300 million in revenue last year, a far cry from Google International, whose revenue stood at a massive $21.8 billion. One downside Google may face if it leaves China is that it would be relatively tough promote its products such as its recently-launched Nexus One and probably upcoming gadgets to the Chinese.
“Google probably can afford to leave China”, said Marshall Meyer, a professor of management at the University of Pennsylvania’s Wharton School. “If they were making a lot of money, I don’t think they’d do this,” said Meyer, who teaches an MBA course on how companies operate in China. “You have to cultivate good relationships with the government — no way around it.”
However, it would cost a bomb if other technology companies such as Intel and Cisco Systems were to cease their operations in China. China accounted for 13 percent of Intel’s sales in 200 and Cisco Systems made 11 percent of its revenue from the Asia Pacific region, excluding Japan, in the most recent quarter, according to Jefferies & Co. Last week, Intel announced that it will launch a financing business in China with chip maker AMD as its first client. The deal is said to worth “hundreds of millions of dollars”.
Google has already stop censoring sensitive search results on Google.cn and if it fails to clinch a deal with the Chinese authorities, then it will not hesitate to leave.
Meanwhile, voting skepticism raised by other Chinese commentators, former Microsoft China president Tang Jun told news portal Sina.com: “This doesn’t matter to China’s Internet users, but if Google leaves China, that would be the most stupid mistake in history. Giving up China means giving up half of tomorrow’s world!”
The attack and Google’s threat to exit China added a dramatic twist to the already uneasy mood in US-China ties roiled by acrimony over trade, currency and arm sales to Taiwan. In recent months, the two countries have crossed swords over currency and trade. Tensions flared further last week when Washington approved the sale of Patriot missiles to Taipei, despite fierce opposition from Beijing.
Via Bloomberg & The Straits Times