The Google Blog’s David Drummond:
Like many other well-known organizations, we face cyber attacks of varying degrees on a regular basis. In mid-December, we detected a highly sophisticated and targeted attack on our corporate infrastructure originating from China that resulted in the theft of intellectual property from Google. However, it soon became clear that what at first appeared to be solely a security incident–albeit a significant one–was something quite different.
First, this attack was not just on Google. As part of our investigation we have discovered that at least twenty other large companies from a wide range of businesses–including the Internet, finance, technology, media and chemical sectors–have been similarly targeted. We are currently in the process of notifying those companies, and we are also working with the relevant U.S. authorities.
Second, we have evidence to suggest that a primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists. Based on our investigation to date we believe their attack did not achieve that objective. Only two Gmail accounts appear to have been accessed, and that activity was limited to account information (such as the date the account was created) and subject line, rather than the content of emails themselves.
Third, 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.
These attacks and the surveillance they have uncovered–combined with the attempts over the past year to further limit free speech on the web–have led us to conclude that we should review the feasibility of our business operations in China. 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.
The decision to review our business operations in China has been incredibly hard, and we know that it will have potentially far-reaching consequences. We want to make clear that this move was driven by our executives in the United States, without the knowledge or involvement of our employees in China who have worked incredibly hard to make Google.cn the success it is today. We are committed to working responsibly to resolve the very difficult issues raised.
I have not yet been able to reach my friends in China to discuss this story, and for now I am judging the Google response strictly by what the company has posted on its “Official Blog,” here, and my observations from dealing with Google-China officials while overseas. Therefore this will epitomize the Web-age reaction to a breaking news story, in that it will be a first imperfect assessment, subject to revision as new facts come in. With that caveat, here is what I think as I hear this news:
– It is a significant development. Significant for Google; and while only marginally significant for developments inside China potentially very significant for China’s relations with the rest of the world.
– The significance for Google is of the “last straw” variety. For years, the company has struggled to maintain the right path in China. Its policy around the world is that it will obey the law of whatever country it operates in. You might object to that — until you think about it: in a world of sovereign states, how could a company possibly say, “We’ll operate within your borders but won’t obey your laws?” (Similarly, Google’s national sites in certain parts of Europe obey laws banning neo-Nazi sites and other material that would be permissible in the U.S.) Chinese laws require search engine companies and other Internet operators to censor certain material. Searches conducted by Google.CN — in Chinese language, mainly for users inside China — have obeyed those Chinese laws. Meanwhile searches on the main Google.COM have been uncensored for material like “Tiananmen Square” or “Dalai Lama.” Anyone who could find a way to get to Google.com – about which more in a moment — could find whatever he or she wanted.
Dealing with those requirements has been part of a non-stop set of difficulties for Google in China. More details about this later on. Like most other Western companies, Google has consistently decided to cope with the difficulties and stay in China. Part of the reason was the obvious commercial potential that the Chinese market has for almost any company in any industry. Another part was Google’s argument — which I basically believe — that the Chinese public was better off with another source of information, even if constrained, than it would be without that option. But, as reported on Google’s site, a latest wave of provocations and intrusions was simply too much.
– In terms of information flow into China, this decision probably makes no real difference at all. Why? Anybody inside China who really wants to get to Google.com — or BBC or whatever site may be blocked for the moment — can still do so easily, by using a proxy server or buying (for under $1 per week) a VPN service. Details here. For the vast majority of Chinese users, it’s not worth going to that cost or bother, since so much material is still available in Chinese from authorized sites. That has been the genius, so far, of the Chinese “Great Firewall” censorship system: it allows easy loopholes for anyone who might get really upset, but it effectively keeps most Chinese Internet users away from unauthorized material.
– In terms of the next stage of China’s emergence as a power and dealings with the United States, this event has the potential to make a great deal of difference — in a negative way, for China. I think of this as the beginning of China’s Bush-Cheney era. To put it in perspective:
I have long argued that China’s relations with the U.S. are overall positive for both sides (here and here); that the Chinese government is doing more than outsiders think to deal with vexing problems like the environment (here); and more generally that China is a still-poor, highly-diverse and individualistic country whose development need not “threaten” anyone else and should be encouraged. I still believe all of that.
But there are also reasons to think that a difficult and unpleasant stage of China-U.S. and China-world relations lies ahead. This is so on the economic front, as warned about here nearly a year ago with later evidence here. It may prove to be so on the environmental front — that is what the argument over China’s role in Copenhagen is about. It is increasingly so on the political-liberties front, as witness Vaclav Havel’s denunciation of the recent 11-year prison sentence for the man who is in many ways his Chinese counterpart, Liu Xiaobo. And if a major U.S. company — indeed, Google has been ranked the #1 brand in the world — has concluded that, in effect, it must break diplomatic relations with China because its policies are too repressive and intrusive to make peace with, that is a significant judgment.
Tom Friedman in NYT:
And here is the other thing to keep in mind. Think about all the hype, all the words, that have been written about China’s economic development since 1979. It’s a lot, right? What if I told you this: “It may be that we haven’t seen anything yet.”
Why do I say that? All the long-term investments that China has made over the last two decades are just blossoming and could really propel the Chinese economy into the 21st-century knowledge age, starting with its massive investment in infrastructure. Ten years ago, China had a lot bridges and roads to nowhere. Well, many of them are now connected. It is also on a crash program of building subways in major cities and high-speed trains to interconnect them. China also now has 400 million Internet users, and 200 million of them have broadband. Check into a motel in any major city and you’ll have broadband access. America has about 80 million broadband users.
Now take all this infrastructure and mix it together with 27 million students in technical colleges and universities — the most in the world. With just the normal distribution of brains, that’s going to bring a lot of brainpower to the market, or, as Bill Gates once said to me: “In China, when you’re one-in-a-million, there are 1,300 other people just like you.”
Equally important, more and more Chinese students educated abroad are returning home to work and start new businesses. I had lunch with a group of professors at the Hong Kong University of Science and Technology, or HKUST, who told me that this year they will be offering some 50 full scholarships for graduate students in science and technology. Major U.S. universities are sharply cutting back.
Tony Chan, a Hong Kong-born mathematician, recently returned from America after 20 years to become the new president of HKUST. What was his last job in America? Assistant director of the U.S. National Science Foundation in charge of the mathematical and physical sciences. He’s one of many coming home.
One of the biggest problems for China’s manufacturing and financial sectors has been finding capable middle managers. The reverse-brain drain is eliminating that problem as well.
I see that in his praise for China he has ignored the, literally, hundreds of schools that collapsed in last year’s earthquake killing the schoolchildren, the Chinese authorities’ imprisonment and execution of dissidents and minorities, China’s failure to live up to the obligations it undertook when it joined the WTO by which membership it continues to benefit, and China’s notoriously opaque and corrupt financial system.
If China is to be part of the modern world and continue to grow and prosper, there will be great and grave changes ahead for the country. It can’t maintain its “beggar they neighbor” economic policies which, while irritating or even painful for us, are disastrous for other developing countries notably Mexico and the struggling countries of Africa.
It needs to start cultivating its own internal markets to a significantly greater degree and allow foreign competitors to share equitably in those markets.
And it can’t hope to control the thoughts of the Chinese people even in an attempt to maintain harmony by which is generally meant the power of the Chinese authorities.
MG Siegler at TechCrunch:
As you’ve no doubt heard by now, Google is ending its censorship in China and as a result, may have to pull out of the country. As you also may have heard, this is the direct result of the attempted hacking of some Gmail accounts. Google obviously takes its security seriously, and they’ve made that more clear by announcing that all Gmail accounts will now default to the encrypted version of the service.
Specifically, once Google is done rolling this out to its users (it’s in the process of doing it now), the default URL for Gmail will include HTTP Secure (you can tell by looking at the url and seeing if it begins with “https”). “Using https helps protect data from being snooped by third parties, such as in public wifi hotspots,” Google writes today on its Gmail Blog. And while this wouldn’t have stopped the type of Gmail hacking that it seems was going on in China, it does make the service significantly more secure. Anytime you hear the words “hacking” and “Gmail” in the same sentence, it’s not good for Google as it attempts to convince everyone in the world that cloud-based email is the way to go. So a move like this following the China situation is a smart one.
Google started offering the option to enable this method of access for Gmail all the time in 2008, but it was previously opt-in. Now it will be opt-out (which you will be able to do in the settings). So why didn’t they turn this on sooner? Because https connections are typically slower than regular http connections since the data must be encrypted and decrypted first. But Google is now saying that after months of testing the latency of https, it feels comfortable enough with the performance trade-off to turn it on for all.
Sarah Lacy at TechCrunch:
Enter the now famous blog post (that was notably, only on the English-language site) saying that Google was no longer playing by the Chinese government’s rules and was prepared to close down Chinese operations if it came to that. Valley elites erupted into applause on Twitter and blogs saying Google was showing more backbone than the US government and was a model of integrity for the world.
I’ll give Google this much: They’re taking a bad situation and making something good out of it, both from a human and business point of view. I’m not saying human rights didn’t play into the decision, but this was as much about business. Lest we get too self-righteous as Westerners, we should remember three things:
1. Google’s business was not doing well in China. Does anyone really think Google would be doing this if it had top market share in the country? For one thing, I’d guess that would open them up to shareholder lawsuits. Google is a for-profit, publicly-held company at the end of the day. When I met with Google’s former head of China Kai-fu Lee in Beijing last October, he noted that one reason he left Google was that it was clear the company was never going to substantially increase its market share or beat Baidu. Google has clearly decided doing business in China isn’t worth it, and are turning what would be a negative into a marketing positive for its business in the rest of the world.
2. Google is ready to burn bridges. This is not how negotiations are done in China, and Google has done well enough there to know that. You don’t get results by pressuring the government in a public, English-language blog post. If Google were indeed still working with the government this letter would not have been posted because it has likely slammed every door shut, as a long-time entrepreneur in China Marc van der Chijs and many others said on Twitter. This was a scorched earth move, aimed at buying Google some good will in the rest of the world; Chinese customers and staff were essentially just thrown under the bus.
3. This is only going to be a trickier issue in the next decade. Think the Shanda acquisition of Mochi Media was an isolated event? Think again. Chinese Web companies are building huge cash hoards and valuable stock currencies and it’s still a comparatively young Web market. Increasingly, these companies could be likely buyers of US startups—not the other way around. Will the Valley’s rhetoric stick then?
This may be the most shocking part: In retrospect Yahoo has played China far better than Google. It pulled out of the country years ago, knowing it wouldn’t win and owns nearly 40% of the Alibaba, a company that very definitely knows how to grow in China. Entrepreneur and angel investor in China Bill Bishop —who hasn’t always agreed with my China coverage in the past—pointed this out, adding “Not often Yahoo looks smarter than Google.”
Derek Thompson at The Atlantic:
Wrapping up, my sense is that Google prides itself on being more than an ad-supported software and media company. It also considers itself a worldwide symbol for something as ubiquitous and invisible as its search robots, which is the human right to free speech and free access to information. This is not a matter of unalloyed altruism. It’s a part of Google’s public image. It’s what makes Google the number-one brand in the world. I think today’s decision supports that mantle.
UPDATE: More Fallows
UPDATE: David Drummond at The Google News Blog:
So earlier today we stopped censoring our search services—Google Search, Google News, and Google Images—on Google.cn. Users visiting Google.cn are now being redirected to Google.com.hk, where we are offering uncensored search in simplified Chinese, specifically designed for users in mainland China and delivered via our servers in Hong Kong. Users in Hong Kong will continue to receive their existing uncensored, traditional Chinese service, also from Google.com.hk. Due to the increased load on our Hong Kong servers and the complicated nature of these changes, users may see some slowdown in service or find some products temporarily inaccessible as we switch everything over.
Figuring out how to make good on our promise to stop censoring search on Google.cn has been hard. We want as many people in the world as possible to have access to our services, including users in mainland China, yet the Chinese government has been crystal clear throughout our discussions that self-censorship is a non-negotiable legal requirement. We believe this new approach of providing uncensored search in simplified Chinese from Google.com.hk is a sensible solution to the challenges we’ve faced—it’s entirely legal and will meaningfully increase access to information for people in China. We very much hope that the Chinese government respects our decision, though we are well aware that it could at any time block access to our services. We will therefore be carefully monitoring access issues, and have created this new web page, which we will update regularly each day, so that everyone can see which Google services are available in China.
In terms of Google’s wider business operations, we intend to continue R&D work in China and also to maintain a sales presence there, though the size of the sales team will obviously be partially dependent on the ability of mainland Chinese users to access Google.com.hk. Finally, we would like to make clear that all these decisions have been driven and implemented by our executives in the United States, and that none of our employees in China can, or should, be held responsible for them. Despite all the uncertainty and difficulties they have faced since we made our announcement in January, they have continued to focus on serving our Chinese users and customers. We are immensely proud of them.
Seth Weintraub at Computerworld
Tom Foremski at ZDNet
UPDATE #3: Drummond at the Google Blog
Rosa Golijan at Gizmodo
MG Siegler at TechCrunch
UPDATE #4: Heather Horn at The Atlantic