Google in China Case Brief
Google in China Case Study Brief
When entering an international market, it has become increasingly popular for companies to provide services as a transition into a new market (Ball, Geringer, Minor, & McNett, 2010). In early 2006, Google made a deal with the People’s Republic of China (PRC) to launch Google.cn, an indigenous version of the search engine run from within China. However, China’s Internet policies along with Google’s ineffective observations of market and cultural diversity hampered Google’s success. This brief will address key questions of Google that led to their inability to successfully obtain China’s leading ISP market share.
Before deciding to accept PRC’s censorship laws, Google should have questioned what they could do to avoid PRC regulations. The Great Firewall of China sanctions using the Internet to subvert state power, incite ethnic hatred, or encourage propaganda (MacLeod, 2006). Google’s mistake was they failed to realize the Great Firewall’s protection can be bypassed by establishing proxy servers outside of China or regional websites from within China. Servers in Hong Kong or Macau would have been beneficial, as censorship is not imposed in these areas. They are recognized by international treaty and are not confined by laws restricting PRC propaganda (Internet Censorship in the People's Republic of China, 2010).
Secondly, Google should have asked what Chinese internet users value in technology. Google failed to realize that China’s approximately 140 million internet users actively engaged in e-commerce are a total market in itself. Instead of Google developing appropriate technology for China users, it integrated what worked in the U.S. to China, which is a prime example of the self-reference criterion (Rein, 2007). The market in China is too big to consider it an auxiliary market, thus requiring new systems to be put in place to compete with Chinese internet firms, such as Baidu. One way to divert this problem was to
When entering an international market, it has become increasingly popular for companies to provide services as a transition into a new market (Ball, Geringer, Minor, & McNett, 2010). In early 2006, Google made a deal with the People’s Republic of China (PRC) to launch Google.cn, an indigenous version of the search engine run from within China. However, China’s Internet policies along with Google’s ineffective observations of market and cultural diversity hampered Google’s success. This brief will address key questions of Google that led to their inability to successfully obtain China’s leading ISP market share.
Before deciding to accept PRC’s censorship laws, Google should have questioned what they could do to avoid PRC regulations. The Great Firewall of China sanctions using the Internet to subvert state power, incite ethnic hatred, or encourage propaganda (MacLeod, 2006). Google’s mistake was they failed to realize the Great Firewall’s protection can be bypassed by establishing proxy servers outside of China or regional websites from within China. Servers in Hong Kong or Macau would have been beneficial, as censorship is not imposed in these areas. They are recognized by international treaty and are not confined by laws restricting PRC propaganda (Internet Censorship in the People's Republic of China, 2010).
Secondly, Google should have asked what Chinese internet users value in technology. Google failed to realize that China’s approximately 140 million internet users actively engaged in e-commerce are a total market in itself. Instead of Google developing appropriate technology for China users, it integrated what worked in the U.S. to China, which is a prime example of the self-reference criterion (Rein, 2007). The market in China is too big to consider it an auxiliary market, thus requiring new systems to be put in place to compete with Chinese internet firms, such as Baidu. One way to divert this problem was to