Why China Is A No-Go Land For Google
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Somehow we found ourselves in times when more, bigger, faster and more profitable is always best. And, most surprisingly, it is also right and commendable.
This is a world where social media uses us as a product to shape our thoughts and preferences, and influences the outcomes of major political campaigns. This world holds some of the brightest human beings on the verge of a nervous break down because they feel compelled to live up to the image of an all-potent Übermensch that media has bestowed upon them. This is a world where we invented hundreds of applications and tools to ease our workload just to find ourselves in an Instagram rat race.
Also, this is a world where anyone, irrespective of their opportunities and social status, can explore the world, travel through time and space and become whoever they want to be given the ability to ask the right questions with the perseverance to become a better version of themselves. This chance was given to us by Internet, and more precisely by Google, the world’s most powerful and most accurate search engine.
From the very beginning, Google adhered to it’s beautiful and ambitious motto “Don't be evil.” It’s like having that good friend of yours that always allows you to copy their answers on the exam, with the difference being that it teaches you how to fish, not simply giving you the catch.
Hundreds of companies, news outlets and small businesses aroused and prospered precisely because of a powerful and transparent “PageRank” algorithm. Whatever the size and whatever the budget, you will find your way if you are providing the service people are actively looking for.
Google’s exit from the Chinese market in 2006 sent a strong signal to the world, to its shareholders and employees - this is not a company that will give up on its values to satisfy an authoritarian regime in a race for the bottom line. This is Google.
What happened since 2006? Why has Google renewed its plans for an epic Chinese come back?
Since 2006, China has become the world's second largest economy by nominal GDP and the world's largest economy by purchasing power parity.
China has turned its image from a copycat economy to a hotbed of innovation, with many of the world’s most renown companies like successful ride sharing business Didi, major marketplace Alibaba, AI giant Tencent and Google’s major competitor Baidu. And this is just the tip of the iceberg.
Since 2006 China has become a leader in artificial intelligence research with more academic papers published in Chinese than any other language, and with realistic plans to become a world leader in AI by 2020.
China has become a leader in gene editing and biotech research, with moral and ethical concerns giving way to timeliness and the will to succeed. And while we are putting ethical barriers and bans on cloning and designer babies, China is pumping money into the creation of new human speciesand the eradication of disease and suffering.
The world has long reoriented itself. It is now looking up to China. This country has given us an alternative model of success, which looks especially appealing in the light of renewed American isolationism and slow disintegration of European solidarity.
China has got us, hands down. This is what has happened since 2006.
Let’s imagine Google was a guy and China was a start-up emerging from stealth mode. The guy was offered generous equity compensation to become China’a CMO is 2006, but with no base salary. Since the guy was too proud to sell his skills for free he opted for an established company with a solid package. In 2018 his shares as China’s CMO would have made him a billionaire. Yet now, there's a new and successful CMO at China's Baidu, whose accumulated wealth rose to US$99 billion in May of 2018.
Google, the guy, lost no time after rejecting the position of Chinese CMO. He worked hard and established himself a name as the world's most valuable employee. But seeing his brand giving way to guys like Apple and Amazon, perhaps Google started feeling the remorse of its 2006 decision. “That could've been me valued at a trillion dollars if not for the strategic mistake I made in 2006.”
After all, China is home to world’s most potent market and is arising as a most promising world leader of the post-unipolar world of the early XXI century. The stealth start-up has made it big.
But what is the cost of success? And is that a skeleton in the wardrobe?
In early 2017 I wrote an article suggesting China might become a first country to establish Orwellian control over its citizens with rankings and good standing defining their chances for a decent living. It was intended as an dystopian train of thought with the potential to become a reality in 5 to 10 years’ time if no alternative gets introduced. Now we know this is exactly what China has implemented to control its 1.4 billion people with more than 12 million people banned from travel due to bad behavior.
It's one thing to be a leader in artificial intelligence and ground-breaking biotech research, yet it's an entirely different thing to establish a dehumanizing surveillance system to make maximum use of its subjects, human beings with unique personalities and inalienable human rights.
According to Michael Bess in his brilliant Tranhumanist book “Make Way for the Super Humans,” all human enhancement must be evaluated against a certain set of criteria to define whether it will bring a genuine improvement to humanity. According to him, humans can only flourish when they wield a substantial measure of sovereign control over the shaping of their lives and thoughts, without external monitoring or interference.
How does China rank in this regard? Where will Google find itself should it do business the Chinese way?
While there is no issue with Google's AI arm working in conjunction with Chinese start-ups, there are several problems with Google's come back to China in its original search engine form.
Apple derives a third of its revenue from China. Despite being the world’s most valuable company, Apple is first and foremost a hardware production company. Amazon is striving to redefine each aspect of our lives and we might soon discover ourselves living in omnipresent Amazonvilles. But Amazon is a marketplace.
Google stands for much more than any of that. Google stands for freedom of speech and thought, for democratic values that were fought in numerous bloody wars starting with the French Revolution. Google stands for a free and uncensored Internet which the Western world has come to regard as a basic human right. It is these rights and these values that set us aside from authoritarian states like Russia and China. It's these values that give us a moral upper hand when all else fails.
Accepting Chinese rules of the game would mean way more than giving up Google principles and transforming it into another bottom line booster. It will signal the failure of Western values and democracy as we know it.
Google's comeback to China would be a historic threshold and the acceptance of China as a country setting the world agenda.
Thus, the decision is much more of national importance than a redefining of corporate strategy and must be approached accordingly.
Back to the bottom line. Google is coming to a densely populated marketplace with established players, customer preferences and multibillion dollar government subsidies given to national Chinese companies.
China is much more prone to establishing major government-supported monopolies.
China’s bike sharing industry has dwindled from a peak of about 100 players to just a handful. Recent bankruptcy of a star in the bike sharing industry, Ofo bike, is partially attributed to its competitors waiving a deposit fee for users with a score of more than 650 on Sesame credit.
And while we cannot rule out the possibility that Google will work hand in hand with the Chinese government to accelerate the adoption of Sesame credit, it's hard to imagine why the Chinese government would not use local players to its end.
While struggling to regain a market position in China, Google would learn the mistake of its move the hard way, by alienating millions of its users in the Western world.
It would hurt the company’s image, and damage the desire of millions of people who want to work for Google, negating the default positive association when choosing a search engine.
Users would move to other search engines given a reasonable option or two, and there's no shortage of search engines.
If Google customers massively opt for Yandex or Safari, those companies' algorithms would be fast to learn the magic of our queries. And while Google would be tarnishing its reputation trying to dismiss China’s reigning search giant, it’s main competitors would sit back and reap the fruits of the boosted usage of their engines.
Potential Conspiracy Theories
Business talks in China have a common stakeholder, the Communist Party of China. And while it's hardly possible that the government has decided to use a foreign company to secure authoritarian control over its citizens, allowing Google to dominate the Chinese search engine market for an information trade off suddenly seems like a very good deal. Google will have no means of protecting itself from the speculations of selling American citizens' personal data in exchange for success in the Chinese market.
Moral and economic arguments aside, information security and the current obsession with personal data protection would render Google a new privacy encroaching villain.
And this might be the beginning of the end for the world’s most iconic non-evil company.
In this sense, Google's new motto is more relevant than ever. Do the right thing, Google.. regarding China!