Google: Searching for profits

Google created a specific portal for China-based users in 2006, Google.cn, which complied with the country’s censorship laws. So, for example, searching for “Tiananmen Square” via Google.cn would retrieve pretty photos of the square as it stands today, with the 1989 massacre stricken from the record.

But following a hack of Google’s mail service, Gmail, apparently from somewhere in China, Google decided to stop playing ball, relaxing this censorship. Over the next few hours, thousands of search queries originating from China featured the query “Tiananmen Square 1989”.

This has raised the possibility that Google’s Chinese wing faces imminent closure. But this is more than simply a clash between Google and the Chinese authorities. Google is one of the most profitable corporations in the US, and the US government was quick to lend a hand. Just days before the relaxation of censorship in China, Google’s chief executive, Eric Schmidt, had dinner with US foreign secretary Hillary Clinton to discuss how technology could be used to promote democracy. Ironically, diners were sworn to secrecy over the talks.

“We look to the Chinese government for an explanation,” said Clinton after the recent hacking. Just over a week earlier, Clinton looked to Google for a donation – with Schmidt donating $10,000 to the Democratic Party.

But this whole crisis began, not due to censorship, which Google was happy to go along with initially, but in the allegation over hacking. There has been little evidence that the hacking was anything other than the work of individual hackers. But more of a problem for Google is the issue of hackers stealing the complex, and coveted, coding which runs Google’s search.

This fear would seriously dent user confidence in the service, especially as Google touts its new “cloud” technology. Under this, all your software and saved data are stored remotely by Google, allowing users to log in from any terminal. It would be a public relations disaster if millions of users’ data could be hacked from one source.

Around 85 percent of all web searches go through Google, and there were 6.7 billion searches in December in the US alone. In 2008 Google made $10.7 billion in the US, £3.1 billion in Britain and $8.1 billion in the rest of the world – of which $200 million was made in China.

China’s demands for censorship have kept Google from achieving its market dominance there. Google commands “only” 17 percent of the Chinese market, compared to 77 percent for its state-owned rival, Baidu. If it looks like the venture is too costly, it would make some sense for the company to withdraw.

Google has also faced criticism in Britain. In 2007 the company’s UK revenue was some £1.25 billion, 90 percent of which was funnelled to Ireland, where corporation tax is less than half that of Britain.

Google is becoming synonymous with the “freedom” and “democracy” of cyberspace. Its unofficial corporate motto, “Don’t be evil”, is a fitting slogan to counter fears that a single corporation has a cached copy of all the sites it indexes.

This is a tiny fraction of what is actually available, with the un-indexed “deep web” estimated to be some 545 times the size of what can be found through search engines, raising questions over how “democratic” the internet actually is.

We can give the final word to Eric Schmidt, who in December had this to say on concerns for privacy: “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place. But if you really need that kind of privacy, the reality is that search engines, including Google, do retain this information for some time and it’s important, for example, that we are all subject in the United States to the Patriot Act, and it is possible that all that information could be made available to the authorities.”