Google's principles could scupper plans for world domination

Google's famed 'do no evil' positioning is likely to create more headaches for the internet giant's attempts to become a truly global multinational corporation, despite its pull-out from mainland China last week.

Google: exiting China
Google: exiting China

That was the conclusion of two respected observers of brand issues in China: Ogilvy & Mather global CEO Miles Young, and Wolf Group Asia CEO David Wolf.

Beijing-based Wolf pointed out that Google's mission statement may have a created a 'rod for its own back', as it attempts to successfully balance moral issues with tempting business opportunities: 'It has given itself a very high bar to get over as it turns into a global company.'

Young noted that Google's initial naivete in entering China in 2006 was compounded by eventual conflict between China's laws and the company's own principles.

'None of us want to be evil – we all have strong principles about what's right and wrong,' said Young, currently based in New York after a 20-year career in Asia.

Google's mistake, added Wolf, was to enter China without adequately considering the impact on the company's brand positioning. 'If you're going to give yourself a moral and ethical mission, as Google has, when you enter new markets, part of your due diligence has to be moral/ethical due diligence.'

Ultimately, noted Young, Google's inability to resolve the conflict between its internal principles and the pragmatic realities of global business proved untenable.

'So many people strongly believe in freedom of expression,' said Young. 'To apply that rigourously in every market you deal with means you cannot effectively be a global MNC. There is a conflict: you have to obey the laws of the markets you are in, and stay true to your principles.

'One has to distinguish between the deeper principles of an organisation and its social activism,' he added. 'That's the dilemma, and other Western organisations have been able to resolve that dilemma without betraying their principles.'

In January, Google went public with claims that its China servers had been hacked and that it would, in response, stop censoring search results on its site. The decision effectively put the company on a collision course with the Chinese government. Last week, Google started redirecting users to its uncensored Hong Kong website.

Both Wolf and Young agreed that Google's decision would likely have been different had China represented a major source of revenue. As it stands, Google accounts for approximately one-third of China's search market, behind local heavyweight Baidu. Google's China revenues, according to analysts, add up to a tiny proportion of its overall global income. Young pointed out that Google's 'prime anxiety' would be ensuring that its website is not blocked in China: 'Its profit stream comes from Chinese companies advertising outside China, not from the domestic business.'

Wolf also noted that his own commentary on the issue at his Silicon Hutong blog had attracted fierce criticism from Google loyalists, particularly in the US. ' In the end the calculus may have been: is it worth fighting a huge percentage of our market to save a few per cent?'

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