Google is the fastest growing Internet search engine company. Google’s mission is “to organize the world’s information and make it universally accessible and useful.”(International Business: Competing in the Global marketplace, pg 148-149) They have a mantra of “Don’t be Evil.” Google started this mantra to be the main message to show consumers they would not compromise the integrity of its search results. This case reviews the situation under which Google was required to censor its content and chose to launch its new search engine site. The case explains the role of the Chinese government and its regulations in the Internet market which had a negative effect on Google’s operations in China. In 2000, Google started a Chinese language service. This service was operated from the United States. Chinese authorities blocked the site in 2002 because China censors information to their citizens. This block surprised Google’s managers.
This was a challenge the managers did not plan on. If they done their research of the Chinese Government and culture prior to launching the Chinese language service, they would have known the block would be inevitable and they could have tailored their service to the Chinese regulations, culture, and laws. Google knew China was an advantageous business and they would need to adapt their service in order for it to be acceptable and profitable. Google also had to move the Chinese operations to China. Operating from the United States caused slow connection speed and hinder their operation and growth. This was a good move because it enabled Google to employee Chinese citizens who would be able to help understand and adapt to the Chinese laws, regulations, and censorship demands. Google managers made a mistake by not researching their target market. However, they acted quickly in learning and correcting this mistake.
Google still offered Chinese citizens a better search engine, but it was not without censorship. The Google search engine offers more results than its competitors, Yahoo, Microsoft’s MSN, and China’s own company, Baidu. Google states Chinese consumers will “get more information on their site, though not quite all of it.” (International Business: Competing in the Global marketplace, pg 148-149) In 2006, Google had 30 percent share of China’s internet search engines. Baidu had 40 percent. This left another 30 percent split between Yahoo and Microsoft’s MSN search engines. These percentages are good, especially when one considers Yahoo and Microsoft had entered the Chinese search engine market prior to Google.
Baidu has several advantages over Google that are mostly associated with it being a Chinese based company, the search engine has “competence in pinpointing queries in the Chinese language” (Yin & Yulin, 2010, p. 4). Government relations with China are precarious for businesses effectiveness. Google did not have a clear understanding of what they would be involved in. China has become more supported and self-assured due to its increasing economic significance.
They are more reluctant to be pressed by Western governments or companies into changing its long term regulations and censorship. Because of this aspect, China does not yet comprehend global strategies and the importance of global public relations. This causes them to be more rigid in their international business dealings. All-in-all, Google has been able to grow successfully in the Chinese search engine market and maintain the number two spot (behind Baidu) in China despite their lack of early research on the Chinese culture, governmental regulations, and laws.
International Business. Competing in the Global Marketplace, Seventh Edition, Chapter 3: Differences in Culture ISBN: 9780073381343 Author: Charles W. L. Hill copyright © 2009 McGraw-Hill, a business unit of the McGraw-Hill Companies, Inc.