News abounds today of Google’s statement, relating to its operations in China. The statement indicated that Google would consider exiting China completely if it could not operate, with government approval, in an unrestricted manner. The post is here: http://googleblog.blogspot.com/2010/01/new-approach-to-china.htmlIn business, to turn away just under 20% of your potential revenue to comply with your own principles must be a hard call to make. But Google is global, and perhaps 4.8 billion people in the rest of the world is a sufficient number to target with AdWords campaigns…

But what is really happening here? It’s difficult to believe that Google would invest so much time and effort, installing services in 2006, and then expect that within 4 years Beijing would accede to Google’s “wisdom” and suddenly allow freedom of speech. Within 4 years? After thousands of years of communist, dynastic and, occasionally, even tyrannical rule? No, somehow this seems unlikely.

It’s a surprising move by Google; one that could incite anything from a murmur of disquiet amongst the ranks of young Chinese teens, avidly seeking knowledge and understanding, to full-blown protests, perhaps even riots. It’s something of a political move, too: reading between the lines, it would appear that Google suspects Beijing of orchestrating the cyber-attacks on it and the twenty or so other organisations, as mentioned in their blog. By saying “play fair or don’t play at all”, Google may be vocalising the sentiments of the underclasses, still struggling to be heard from within the provinces.

Something that has not been mentioned (to my knowledge) so far in the press is the opportunity to expose Hong Kong. Under Chinese rule, but with special provisions (such as more liberal allowances on internet services), Hong Kong would present a potential new base for Google’s Chinese operation. But perhaps that’s a step too far?

The question remains whether it’s a viable exercise, and for viability, read “bottom-line”. Implementing the required censorship and publishing restrictions as required by the Chinese government will likely have been more technical trouble than they’re worth for Google, who elsewhere in the world have hands-down probably the most advanced information and revenue infrastructure to be found.

But information and revenue go hand in hand in Google’s business model. The less information, the less dynamism on-site, then the less interest there will likely be and the less uptake, over time. Google works in the west because there are virtually no limits, within the law, on trading ideas and services. In the far east, Google may have just observed a synergy that works to the detriment of its model. It may also be outgunned by larger powers at work; Beijing’s insurance.

We shall see if Google’s gambit, encouraging closer but more open ties with Beijing, will pay off.