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Alex Kimani

Alex Kimani

Writer, Divergente Research LLC

Alex Kimani is a veteran finance writer, investor, engineer and researcher for Divergente Research LLC and Safehaven.com. 

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Google Accepts Chinese Censorship For Big Payout

Google China

In 2010, leading search engine Google finally threw in the towel on China, beating a hasty retreat after operating in the country for only a decade. Google decided to exit the lucrative market after it came to loggerheads with authorities after it stopped censoring search results following a sophisticated phishing attack on Gmail accounts of Chinese human rights activists by the Beijing government.

But now reports say that Beijing is ready to welcome Google back with open arms—as long as it complies with the country’s strict censorship regime. Indeed, the report says Google is already developing a censored search engine codenamed Dragonfly for the Chinese market.

Too Big To Ignore

Unlike its social media peer Facebook, Google had managed to successfully court the Communist government and establish a working relationship. But it was a frenemy relationship more than anything else, with Google being forced to design a censored search engine after the authorities blocked the first uncensored version.

It’s decision to drop censorship and finally quit the huge market cast it as an exemplar of corporate moralism and a democratizing force in the world.

But its latest decision to rebalance its moral accounts aptly demonstrates just how hard it is for  a company with a huge appetite for growth to ignore the dizzying prospects of nearly a billion users. Related: Why Rising Inflation Won’t Help Gold Prices This Time

Google never fully exited China and still provides a number of mobile apps including Files Go and Google Translate in the country. Just last month, it launched a mini-game on Tencent’s popular WeChat service.

But search remains the company’s bread and butter, a platform that helps it to easily monetize other services.

The lure of 772 million internet users has proved irresistible, and Google has pledged to automatically filter any websites blocked by China’s infamous Great Firewall and blacklist sensitive queries according to Intercept reports. By doing so, the company will join the likes of LinkedIn, which plays by Beijing’s censorship rules.

Quite naturally, not everybody is impressed by the about-face.

Eva Galperin, cybersecurity director at Electronic Frontier Foundation, has labeled it “…an extremely disappointing move,” and added “they are essentially using Google as a propaganda tool and Google is letting themselves be used.’’

The Electronic Frontier Foundation was founded by the libertarian geek John Gilmore who once famously quipped:

‘‘The internet interprets censorship as damage and routes around it.”

Maybe Google finally discovered that being an advocate of free speech does not contribute to bottom line growth.

Squaring It Off With Baidu

If Dragonfly eventually sees the light of day, the search engine will have its work cut out trying to cut itself a niche in a crowded market.

By the time Google exited China eight years ago, it had managed to garner a respectable 30-percent search engine market share but found itself in the unfamiliar territory of having to play second fiddle to Baidu. Back then, Baidu was pretty aggressive and employed a slew of underhand tactics that Google considered infra dig, yet they ended up working in Baidu’s favor.

Baidu fully recognizes the threat posed by Google’s re-entry into the country, and a company official has issued a polemic saying the company is in an even better position to face its old adversary. Meanwhile, BIDU stock has been sliding since the report came out.

Related: What Is Vanadium And Why Did Its Price Just Skyrocket?

Luckily for Google, it appears as if public sentiment is in its favor this time around. A recent informal internet poll on Weibo found that 86 percent of Chinese internet users would pick Google over Baidu:

“…Can’t you tell from Chinese people’s attitudes that their hearts have turned cold on Baidu?” reads one comment with over 4,000 likes.

(Click to enlarge)

Source: The Verge

By Alex Kimani for Safehaven.com

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