The man who launched Google in China says it's pointless to re-enter the market

"They are going to have a hard time."
October 12, 2018, 9:45am
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Google’s plan to return to China with a censored search engine is doomed to fail, according to the man who once spearheaded the company’s business in Beijing.

Google has been secretly developing a censored search engine — known internally as Project Dragonfly — that would blacklist search terms such as “human rights,” “student protest,” and “Nobel Prize” in order to satisfy the demands of the Chinese government.

It’s a move that has drawn condemnation from rights groups and lawmakers, as well as from Google’s own staff.

Though the company says it has no firm plans to launch the product, the transcript of a meeting in July, leaked this week to The Intercept, suggests the company is seriously looking at a return to China.

“You have taken on something extremely important to the company,” Ben Gomes, Google’s search engine chief, told the meeting. “I have to admit it has been a difficult journey. But I do think a very important and worthwhile one. And I wish ourselves the best of luck in actually reaching our destination as soon as possible.”

But even if Google meets the Communist Party’s requirements and ignores the backlash, launching a product into China now is folly, according to Dr. Kai-Fu Lee.

“As this stage, China has evolved into its own parallel universe, so an American company trying to enter, they are going to have a hard time — just like a Chinese trying to enter the American parallel universe will have a hard time,” Lee told VICE News.

In 2005, Lee joined Google from Microsoft and was charged with launching the company’s presence in China, including the launch of and the establishment of a research and development lab in the country.

“When I was running Google China, I think Google was an integral part of the ecosystem and had Google stayed in China and maintained its market share it would have had a chance to become part of the ecosystem,” Lee said.

Lee surprisingly quit the company in September 2009 to join a venture capital firm. Months later, Google announced it was pulling its search engine out of the market, saying “it “could no longer continue censoring our results.”

In the intervening eight years, China’s surveillance and censorship of the internet have greatly expanded, but it appears the draw of a potential 750 million new customers was too much for Google to resist.

The intervening years has also seen China’s domestic internet ecosystem flourish, creating some of the most valuable online companies in the world, including Alibaba, Baidu, and Tencent.

“After the withdrawal and trying to re-enter, Google is in the same position as Facebook or Twitter or other companies. It would be hard.,” Lee said.

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While Google has many strings to its bow, in China companies such as Alibaba and Tencent offer a huge range of services that combine aspects of search, social media and e-commerce under a single brand.

“The users already have a preferred branding and technology which works in a very intertwined way. Google cannot just go to China to be a search engine anymore, it would have to sit with the Alibaba and Tencent ecosystems, and that is different from the way Google competes with Facebook and Amazon ecosystems,” Lee said.

Cover image: Kai-Fu Lee, chairman and chief executive officer of Sinovation Ventures, speaks during the TechCrunch Disrupt 2018 summit in San Francisco, California, U.S., on Wednesday, Sept. 5, 2018. (David Paul Morris/Bloomberg via Getty Images)