Published on the 09/08/2018 | Written by Jonathan Cotton
Open internetter’s outrage won’t stem FAANGs wanting a piece of the PRC...
Some background: On August 1 The Intercept broke the news that Google was working on a project – code-named Dragonfly – that would see it launch a custom (read ‘censored’) Android search app in China. According to the leak, the app would automatically identify and filter websites typically blocked by China’s national firewall, including such nefarious content as the BBC’s website and online encyclopedia Wikipedia.
According to the report, things have been underway since last year, when Google chief executive Sundar Pichai met with Wang Huning, a senior figure in the Chinese Communist Party, which was followed soon after by Google’s announcement that it would open an AI research centre in Beijing. So far, so good, and in May the search engine giant also launched the China-specific File Go file management app for Chinese users.
Of course everyone wants into China, but it’s not easy. Facebook recently announced it was creating an “innovation hub” in emerging tech capital Hangzhou only to have the deal squashed by officials in Beijing the very next day. Apple has had a little more success with recent investments in the region (and with China responsible for about a fifth of the tech giant’s revenue).
Officially, China is open for business. The state-run People’s Daily newspaper recently published a piece saying that Google is welcome in China in principle, but that “it must comply with the requirements of the law.”
So there we have it. Google – along with practically every other tech giant in the world – wants a piece of the China pie. So what actually happens if Google really does launch in the PRC?
Well, first of all Google might have a fight on its hands bigger than censorship. Chinese internet company Baidu (the second largest search engine in the world and holder of a 76 percent share of China’s search engine market) is talking tough.
If “Google decides to return to China,” wrote Baidu CEO Robin Li recently, “we are very confident we can just PK and win again” (‘PK’ stands for ‘player-kill’, a gaming reference meaning to eliminate another player). Note: When the news of Google’s intention to return to China broke, Baidu’s stock price fell almost eight percent overnight.
With a population of 1.4 billion, 772 million of whom are internet users, Google’s coveting of the Chinese market is understandable. And they’ve been here before of course, launching a censored search engine in 2006. That relationship had soured by 2010, with Google facing intense criticism from many quarters in the West, escalating demands by the Chinese government to limit free speech and multiple cyber attacks believed to originate from China.
But if they can beat Baidu in the search game, there might still be one more unexpected hurdle to overcome.
While most of us like to think of Alibaba as a competitor to Amazon – across both eCommerce and their cloud computing businesses – the eCom giant may pose a threat to Google’s supremacy both in China and elsewhere. That threat is twofold: Firstly, Alibaba knows how to sell advertising. The company is predicted to draw almost US$16 billion in digital advertising revenue in China this year alone, one-third of the national total. Secondly, Alibaba collects user data just as voraciously as Google, dominating especially in ecommerce and mobile payments, and these days if you’ve got the data the world is your oyster.
Who’s going to ultimately prevail is still anyone’s guess, but expect Google’s ‘Don’t be evil’ mantra to be well and truly put to the test as the tech giant does what it must to secure a piece of the fastest growing digital market in the world.