Google does the right thing in China, but is it for the right reasons?

Four years ago this month, Google controversially started censoring search queries in China at the local government's request. Microsoft and Yahoo soon followed. Today, in a stunning blog post, Google Chief Legal Officer David Drummond writes: "We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China."

Google's seemingly altruistic gesture is as much about business priorities as was the original decision to censor search results in China. Otherwise Google wouldn't have given in to Chinese government demands four years ago.

Sometime in Spring 2006, I was asked to offer analysis of Google, Microsoft and Yahoo censorship of Chinese search results for a program that aired on the National Public Radio station in Washington, D.C. I don't recall which program (If someone else knows which program and when it aired, could you please put it in comments). But I do recall how I answered very pointed questions about the ethics -- the morality -- of the three search providers' Chinese censorship actions.

The first question to ask: What is moral? The answer is ugly by my standards, and that of many other Americans: There is no moral high ground in business. The high ground is quagmire, because all public companies share a single, moral objective -- to make profits for stockholders. Any action that undermines making money for shareholders is immoral. From the measure of shareholder morality, Google had to do whatever was necessary to expand its search business in China, including cowing to censorship demands.

It's the great contradiction: U.S. law treats businesses like people, but the organizations don't share the same moral objectives as the human beings they represent. The "good of all" is the shareholder, not humankind. This moral difference is one of the major reasons some businesses egregiously act against the common good of all people.

By my measure of morality, which puts all people above the individual or the business, Google acted wrongly by censoring search data in China. But by shareholder morality, Google acted properly. Yesterday's blog post indicates that Google's actions may soon align with broader American morals -- that freedom of speech is an undeniable right, and, therefore, mass censorship is wrong.

"Google Rights" Violations

That said, I sense Google's changing China policy is as much, if not more, about its moral obligations to shareholders than some broader altruism directed at Chinese citizens. The context Drummond sets in his blog post is the reason for my assertion. He frames Google's coming changes in China to attempted breaches against "at least twenty other large companies from a wide range of businesses -- including the Internet, finance, technology, media and chemical sectors." Google is among them. Drummond explains:

We have evidence to suggest that a primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists...As part of this investigation but independent of the attack on Google, we have discovered that the accounts of dozens of U.S.-, China- and Europe-based Gmail users who are advocates of human rights in China appear to have been routinely accessed by third parties. These accounts have not been accessed through any security breach at Google, but most likely via phishing scams or malware placed on the users' computers.

Google's core business takes place in the cloud, where about 99 percent of revenues derive from search, which is all about information. Anything that could jeopardize Google's core business is bad for shareholders. The risks posed by these stealth attacks cannot be ignored, nor Google's position as an American company allegedly under attack from intruders in China. It's no surprise Google is re-evaluating its business role in China.

From one perspective, yes, Google is making a stand for human rights. But Google also is making a stand for its shareholders and their right to make money from the public company they have invested in. The question: Would a Google pullout of China do investors more harm than good? Had Google made a stand against censorship four years ago, the answer would likely be yes.

But in hindsight, maybe that answer should have been no. Four years later, Google's search share in China is among its lowest anywhere in the world. Preceding Google's censorship decision, search share was declining fast, from about 33 percent in 2005 to around 25 percent in 2006, according to China IntelliConsulting. In the four years since agreeing to censor search data in China, Google' search share continued to erode. It's now less than 20 percent, while Chinese search rival Baidu has more than 75 percent share. Google's search business in China is no better off for censoring information, so the company risks little by taking a stand -- even if it means pulling out of China.

A stand against censorship -- and seemingly for human rights -- is timely following last month's Chinese capital punishment against a British citizen and several, recent profile dissent court cases and convictions. Google's stand against censorship establishes a clear policy for doing business in China. Four years ago, the company permitted a "Google rights" violation -- and one somebody in China extended through security attacks seeking information about dissidents. Google is acting to censor information to the Chinese government, rather than to the people of China. It's a surprising turnabout

Still, as previously stated, behind Google's seeming altruism is the moral mandate of shareholders. In America, human rights is good business. While risking little in China, Google can raise its prestige as a crusader for human rights in markets where search share is stronger but there's more growth ahead. What's good for Google's business is good for shareholders. Can Google seize the moral higher ground, while ceding the lower areas -- meaning its business in China? First answer will be China's response to Google's plans and whether or not the company can officially continue conducting business in the country. The answers that follow will determine, as measured by broader American cultural mores or the shareholder mandate, whether Google's stand against China censorship is moral.