Google vs. China: The rise of the Data State
Ian Lurie Jan 13 2010
Google’s pissed at China. China is trying to pretend they don’t care. Under all the high school drama there’s a serious change, though, that I can’t ignore. So I’m putting on my historian hat for today’s post. Read it anyway. History is fun, when you look at it the right way:
Used to be, if you were a corporation and wanted a foreign government to behave themselves, you got your nation’s armed forces to do it for you. Want to sell in Japan? Get President Roosevelt to send the navy (Big Stick Diplomacy)! Pesky pirates holding up trade? Declare war (The First Barbary War)!
Google’s just proven there’s change a’coming, though: Google is the first Data State, and they’re almost ready to take on nation-states.
Before you say “Sure, but China could just blow them up,” take off your Typical American hat and hear me out.
Google has the leverage
Google has a lot of stuff that China wants:
They have search tools the Chinese government can use to censor materials and find materials that need censoring. They have a search index and other cool gadgets that Chinese businesses want so they can build mashups and dig for data they need to grow. They bring foreign currency into the country via their offices and nascent business in China.
They lend China an air of legitimacy by relationship alone. That makes it easier for China to exert control over internet access within their borders.
Google has the flood of data that keeps creeping over China’s firewalls. Try as they might, the Chinese government won’t be able to plug every leak.
Google has all of the leverage. China has all of the frustration.
Now, Google’s going to flip the switch, and China’s going to lose an employer, a source of income, and a vaguely controllable pipeline to the internet. And they’re going to lose contact with a major threat to their dominance of media within the country.
China can respond by… what?
They can try to really close access to Google. Good luck with that.
They can rely on Baidu to replace Google’s presence. Riiiight. Baidu rankings are 100% for sale. And there’s the teeny matter of all those other applications.
They can try to bully Google into staying and playing by their rules. By threatening to… shut them down? How, exactly? And what would that do to their relationship with other companies?
My prediction: Google leaves China, then returns within a year, on their own terms.
Google Nation: Be afraid
Google is a Data State. They’ve got control of vast amounts of information. They have tremendous capital. And they can fight off foreign attempts to steal/damage that data and capital, even when those attempts come from First World governments.
It’s fun to watch now, and we’re all cheering as they stick it to the Big Bad Chinese Government.
But the implications are a little scary. Google went from a graduate project to data state in about 10 years. What will they look like in another 10?
CEO & Founder
Ian Lurie is CEO and founder of Portent Inc. He’s recorded training for Lynda.com, writes regularly for the Portent Blog and has been published on AllThingsD, Forbes.com and TechCrunch.
Ian speaks at conferences around the world, including SearchLove, MozCon, SIC and ad:Tech. Follow him on Twitter at portentint. He also just published a book about strategy for services businesses: One Trick Ponies Get Shot, available on Kindle.