Google’s China gambit less about censorship and more about defense of IP

courtesy: AFP/Getty images

The latest in Google’s China gambit is that closed door “talks” between China and Google are progressing, yet the future of Google’s China “search” business remains in doubt. The fact that talks are continuing at all, may be due to to Google’s backtracking on their initial defiance of compliance. After a brief half-day (January 13) “illegal” suspension of their self-imposed filtering of searches, Google.cn is back in compliance with Chinese laws (sanitized searches).

China was none too happy with Google’s abrupt announcement last week. The threat to end censored searches on Google.cn, and thinly veiled accusations of cyber attacks, were a direct affront to the Chinese government. The Chinese response (Go to Hell) was communicated through numerous channels, some public and some private. The ominous “finger on the trigger” standoff between Google and China did not last long. Google apparently “blinked.” While Google may have been willing to take a stand against censorship, and forego their Google.cn search business, they may have been less willing to risk their Google Apps and Android business in China. Hence, Google is back to filtering searches on Google.cn until a new modus operandi (“a new approach to China”) can be worked out.

Now that Google is, for the time being, adhering to China’s censorship laws, there appears to be hope for salvaging Google’s non-search business in China. Earlier this week Marbridge Consulting reported that China carriers’ would continue with their Android smartphone and mobile operating system projects. For more background, read > Google and China working to salvage Android plans. No word yet on the fate of Google Apps in China, but my guess is that this business opportunity will remain intact.

Operation Aurora

Why did Google take such a bold and public stance (causing China to lose face) against censorship and state-condoned cyber attacks? My theory is that the censorship issue took a back seat to concerns over cyber attacks dubbed “operation aurora” and attempts (some successful?) to steal Google’s intellectual property (IP). I believe there is far more to this story than meets the eye. Google did not directly accuse China of being the perpetrators of the attacks (it was done by “third parties”), but you can’t read Google’s message any other way. Google believes this was state-sponsored (or at least state-condoned) espionage. I’m willing to take Google’s side of this matter. To make such an accusation without proof would be reckless, and I suspect that Google has more evidence than they are willing to share with the public. I also believe Google’s executive management team was livid after uncovering the cyber-spying and hence the abrupt and quite public move to rattle China’s cage.

If anyone watched the recent Google Special running on CBNC, the last five minutes of the program focused on Google Apps and the critical need for Google to maintain a high level of trust (i.e. “hack proof” and “highly secure”) in the web-based (a.k.a.”cloud”) storage of client data. A very important part of Google’s business strategy is enticing businesses to move away from “behind the firewall” enterprise apps (on secure corporate servers) and over to “cloud-based” Google Apps and web-services. If business clients believe that Google’s “cloud” is full of security holes (less than 99.99% secure), it’s game over for Google’s web apps strategy. This is powerful motivation for Google to aggressively defend against cyber attacks and IP theft!

image courtesy: CNNMoney.com

The more I read on the subject, the more it seems that a prime motive for Google’s threat to shutter their Google.cn operations was protection of their IP from external hacks and also allegedly from internal IP theft via spies planted on Google’s China staff. I would regard the “internal moles” story, now buzzing around the Net, as plausible yet in need of further corroboration. Read more details > here and > here Update: Now both PBS and CNET have jumped on the “internal spies” story;

Sources familiar with the investigation told CNET last week that Google was looking into whether insiders [planted spies] at the company were involved in the attacks, but additional details were not known at the time.

There have also been reports about Google engineers in China who are, for the time being, still employed, but can no longer access their projects (password lockout). Moreover, reports continue to flow in about Google employees in China being put on leave. Read > Google China Employees Given Holiday Leave, Networks Being Scrutinized

The Google China gambit story is still evolving and I suspect we will continue to read more about hacking and alleged cyber spying. In fact there are new reports today (Jan 18) about Associated Press journalists in China having their Gmail accounts hacked.

Flowers for Google China

Stay tuned …

laying flowers Google HQ Beijing