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Google, China deal a blueprint for business practices

Janet Babin Jul 9, 2010
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Google, China deal a blueprint for business practices

Janet Babin Jul 9, 2010
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TEXT OF STORY

Tess Vigeland: Google’s impasse with China over censorship is over for now. The search giant says the Chinese government renewed its internet hosting license to operate in the country. China came very close to shutting Google out of its fast-growing market. It didn’t want the search engine giant redirecting users to its Hong Kong based site. But Google didn’t want to censor its results. Janet Babin reports on how the compromise could serve as a model for other companies wanting to do business in the Middle Kingdom.


Janet Babin: Google decided earlier this year that it couldn’t uphold its famous business philosophy — to make money without doing evil – and continue to censor search results for Chinese users. Google started redirecting Chinese users to its Hong Kong site in March. But the Chinese government was insulted. So Google cooked up a last ditch work-around. It stopped the automatic redirection, but made the Hong Kong site just a click away. That subtle change seemed to be enough for Chinese officials. Perry Wong is an economist with The Milken Institute.

Perry Wong: The Chinese government want to show to the world I suppose, that we are still open for business. We can still work together and make some deals.

The compromise lets Google take the high road to some extent. Even though it knows China may still tamper with its search results, it doesn’t have to do any dirty work to please China. Analyst Gene Munster covers Google at Piper Jaffray.

Gene Munster: Google is doing their part, they’ve washed their hands clean of any sort of censorhips. The government is applying a firewall and a filter on top of Google’s results.

This delicate ballet benefits both players. China shows it’s open to the global community. Google gets access to a growing middle class. Matt Comyns is CEO of Pacific Epic China Research.

Matt Comyns: You have to get in there and roll up the sleeves and work with the Chinese government to try to grow in that market. It can’t be ignored. You have to be there.

Even if it means a business has to compromise a part of its core philosophy.

I’m Janet Babin for Marketplace.

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