Responding to a highly sophisticated cyberattack on opponents of the Chinese government, Google said Tuesday that it is no longer willing to operate a government-censored search engine in China — and may shut down its Chinese operations altogether.
Google’s stunning announcement could cost the company billions of dollars in lost future revenues, since experts said it’s unlikely the Chinese government — which broadly filters Web content and blocks access to social networking sites such as Facebook — will back down and open up what has been dubbed “the Great Firewall.”
But the search giant’s move may pressure other U.S. Internet companies doing business in China to take a stance on government censorship, and it will almost certainly complicate U.S.-China relations.
In a lengthy posting on its official company blog Tuesday afternoon, Google said it had uncovered a “highly sophisticated and targeted” cyberattack in December originating in China against Google and at least 20 other companies in which hackers attempted to gain access to the Gmail accounts of Chinese human rights activists.
Google said those attacks, combined with Google’s subsequent discovery that the Gmail accounts of dozens of Chinese human rights advocates in the United States, Europe and China were being “routinely accessed” by unknown third parties, prompted the company to reassess whether the world’s leading search site should continue to operate in the world’s biggest internet market.
Google’s withdrawal from China would come with a major financial cost; its stock was already sinking in after-hours trading Tuesday. While Google is a distant second to the Baidu search engine in China, the rapid growth of the Chinese market means future lost revenues could be enormous.
“Its future value certainly will be huge, just by virtue of the sheer size of the market. The opportunity cost to Google might be many billions of dollars over time if they were to pull out — almost certainly,” said analyst Greg Sterling of Sterling Market Intelligence. “I just think it’s kind of a courageous move of integrity.”
The surprising move could reset Google’s image back to its “Don’t Be Evil” idealism after recently taking on, in the eyes of some, the appearance of an Internet juggernaut seeking to control the world’s information.
“In a world in which we are so used to public relations massaging of messages, this stands out as a direct declaration. It’s amazing,” said Jonathan Zittrain, professor of Internet law at Harvard Law School and co-director of Harvard’s Berkman Center for Internet & Society.
The Berkman center worked with Yahoo, Microsoft, Google and United Kingdom-based mobile phone company Vodafone, as well as human rights organizations and investment groups, to develop a code of conduct for operating in countries that censor Internet activity.
“There is something special about the Google brand and the accommodations it made with the Chinese government to let Google China go forward was almost in friction with that. I sense an almost relief from the company saying, ‘Why do we have to do this?’ ” Zittrain said. “I think the Chinese are going to say, ‘Bye-bye Google.’ But just think about what happens if Google’s engineers set about making information as accessible as possible in China.”
Other analysts, however, said Google’s lack of traction in the Chinese market might have made the decision easier.
Google’s declaration and the accusation of China-based cyberattacks will further complicate U.S.-China relations, said Susan Shirk, a former deputy assistant secretary of state in the Clinton administration responsible for U.S. relations with China. “It adds to the already difficult agenda we have with China. It’s not going to be easy.
“I presume that Google has pretty strong evidence, otherwise they would not make this public statement and declare battle with Beijing,” Shirk said.
A Google spokeswoman said the company would not reveal the identity of the other companies targeted, but said they included companies from the Internet, finance, technology, media and chemical sectors.
Google does not have evidence that the Chinese government was behind the attacks, she said, but “we do know it originated in China.”
San Jose software-maker Adobe Systems is investigating what appears to be a related incident, which Adobe described in a statement as “a sophisticated, coordinated attack against corporate network systems managed by Adobe and other companies.” Adobe said it didn’t appear that any sensitive information had been compromised.
While Google filtered some information on its Chinese Web site, Google.cn, its filtering efforts were far less extensive than those of its China rival, Baidu.com, the country’s largest search engine, said Rebecca MacKinnon, an expert on Chinese censorship.
“It certainly has been looking like it has been in a no-win situation,” she said, adding that Google had apparently concluded: “If we are making public declarations about upholding our users’ interests, at some point we have to stand up for our users’ interests.”
Google, which refused to place its servers in China and did not offer services that required it to collect personal data on users, most likely believed the hacking put users at risk, MacKinnon said.
The move, she added, “is an unprecedented situation” and will reverberate in China.
“It certainly sends a message to people in China when the world’s biggest Internet company says China’s policies for controlling the Internet are not acceptable,” she said. “When Google stands up and says things have gone too far in China — people are going to think seriously about that.”
To deliver useful search returns from the so-called real-time Web–such as seconds-old Twitter “tweets” reporting traffic jams–Google has adapted its page-ranking technology and developed new algorithmic tricks and filters to keep returns relevant, according to a leading Google engineer.
