Google and China

Theo Adwitya

MGMT 461-001

03/26/12

Case Study #3: Google and China

1. What were Google’s interests and positions? What were its alternatives and how good were they?

Google’s position is that they want to operate their services within China, behind its “great firewall”. Running Google’s flagship product/service, google.com, outside of China hindered their ability to deliver their search results to the Chinese people. By positioning themselves within China and being able to register a .cn domain, Google argues that they will be able to be more efficient and effective. Unfortunately, the Chinese government monitors all Internet traffic within their country. They try to filter material and the Chinese government is selective of what their people are informed of or exposed to. In doing so, this puts a strain on Google’s performance because it adds another step to their process to deliver information. If they are able to operate within China’s great firewall, Google will be able to overcome this “lag” in performance and speed so that it can better compete with China’s search engine giant, Baidu. Google’s interest is that they want to capitalize on the billion plus people that reside in China. Google is “the” search engine people use in the states because their results are generated quickly and quite precise. They’d hope to bring that brand recognition into the vast and expanding Chinese market. Google sees a huge market for their service in China and this can generate huge revenue numbers for their overall business. The potential to increase their revenue and brand recognition in China is enormous.

Google’s alternatives were: enter China, lobby for a larger stake in Baidu, or vacate the whole idea of doing business in China altogether. However, each alternative comes with its advantages and disadvantages. If Google entered China, they would have to give up their “moral” principles. Businesses that operate in China are subject to follow their...