Google's March Out of China Was More a Stroll Next Door
Google (GOOG) has wanted to enter the daily deal/group coupon craze -- it's why the company has expanded its local deals service to five cities in the U.S. But it's not stopping at national borders. Google has a new deal aggregation service ... in China.
But, wait, didn't Google storm out of China supposedly over the issue of censorship and write off the money it made as non-material? It did. But the exit stage right was only to run servers out of Hong Kong. Google never really left China, and the continued and increased interest is probably due to the management changes at the company.
If they ask, don't tell
As a reminder, Google objected to filtering search results for China. The country's government had made that mandatory as part of its censorship regime. In January 2010, Google said that it would review its business options in China.
Google was getting about 1 percent to 2 percent of its revenue from the country, according to various estimates. At the time, chief legal officer David Drummond called the amount an "immaterial" portion.
The company stopped censoring searches from China in March 2010. Eventually, it pulled out its operations and moved them to Hong Kong, where it continued to provide uncensored search results, which the Chinese government then censored.
Keeping the government happy
Co-founder Sergey Brin was the one who wanted to take a hard line because the censorship reminded him of being young in the Soviet Union. Larry Page and Eric Schmidt were more in favor of appeasement.
On the whole, Google wanted to keep doing business in China because of the opportunity they thought it offered. That's why it wanted a renewal of its business license for the country, which it finally got in July 2010. (The government renewed the annual license again in September 2011.) Even if Google was far behind the Chinese search engine Baidu, there were still all those Android phones that might eventually find their way into the hands of consumers.
Change of the guard, and strategy
Since then, Brin "decided to devote his time and energy to strategic projects" with the title "co-founder." It's another way of saying that he's not overly involved in day-to-day activities. Schmidt became chairman and Page is CEO. The people at the top most in favor of appeasement are the ones running the show.
So there shouldn't be any surprise that Google added a deal aggregation service called Shihui that brings in offers from more than 100 partner sites. Currently, Google has 19 percent search share in China. It probably hopes that interest in deals will drive traffic more than it's been able to do since moving the search servers to Hong Kong.
Related:
- Google's Choice: Friend of the Internet, Friend of Tyrants, or Both?
- Google Says Whew! and Pulls the China Gun Away from Its Head
- Google's Radical Realization: Who Needs China?
- Google to China: Take Your Firewall and Shove It
- Google's Good/Bad Cop China PR Tactic May Yield Self-Injury
- Google: Smoke Clears and the Waffling Starts
- High Tech Should Follow Google ... Right out of China
- Google Response to Chinese Hacking a Smoke Screen, not a Revolution
Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.
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