Google comes clean: looking to make up for “lost decade” in China
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Google comes clean: looking to make up for “lost decade” in China

The end of last week marked a milestone in the Google story: it finally admitted that it wants to get its market-leading search engine back into China, and make up for the near-decade it missed after pulling out in 2010. How serious is the company? While reporters had previously publicised Google’s plans to develop a censored search service for China (Dragonfly), this is the first time company executives have discussed it openly – and the reversal of sentiment is notable.

Alphabet’s share price has increased by 15% so far this year

graph 2108 google

SOURCE: Yahoo Finance

Google’s co-founder, Sergey Brin, was a driving force behind Google’s initial withdrawal from the country in 2010. At the time, he told the Wall Street Journal that the Chinese approach to censorship had the “same earmarks of totalitarianism” as that found in the U.S.S.R. (where, incidentally, Brin was born). However, last Thursday, he drew a more measured line, saying that questions about Google’s interest in China get raised “every year or so,” and that “there’s a handful of things we have been able to ship in China and that’s great. You know, it’s slow-going and complicated.”

Priyendra Deshwal, a software engineer who was working at Google in 2010, recalls that staff was on the fence about the decision to leave China. He said: “we could see both sides of the coin. There was debate in the sense of it being a very big business opportunity lost, but also an example of the company standing by its principles. At that time, the company made the decision based on principles and not wanting to operate where it didn’t agree with the way the country was run.”

Of course, back in 2010, the company’s motto was still “don’t be evil”. Now, it takes a less black and white view of the world – and the company has come under fire from its staff for both the planned re-entry into China and recent military contracts.

However, Brin’s successor, CEO Sundar Pichai, has a strong argument gaisnt the naysayers on moral grounds. He told listeners: “I genuinely do believe we have a positive impact when we engage around the world and I don't see any reason why that would be different in China.”

Disclosure

Dominion holds Alphabet in its Global Trends Ecommerce Fund.


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