Will Silicon Valley go to War with China?

To protect the privacy of its users and data, will Google really pull out of the country?

A major challenge for all companies doing business with china is how to you gain access to the huge market of over a billion customers without signing away your crown jewels. Many companies reluctantly have signed over their intellectual property in exchange for being able to compete in the market. At a breakfast I attended some time back, Jack Welch mentioned this was something GE had to do to gain access the mainland.

Now Google is finding itself in a somewhat similar situation as it is being hit with what it calls a sophisticated attack which has already resulted in some user accounts of human rights activists being infiltrated.

Without overtly saying it, the implication of course is the Chinese government is the culprit and Google is even threatening to pull out of the country over the incident. In addition, it will no longer censor its results. From an investment standpoint this could have major implications and it will be very interesting to see if President Obama gets involved and weighs in on human rights in China once again.

In the world of tech, we often discuss how powerful Google is — the question now is whether it is powerful enough to make a bold political statement which motivates Chinese citizens to stand up to their government and demand it represents them with democracy, free speech and myriad other protections we take for granted in the US.

Moreover, we will see if other companies such as Microsoft and Yahoo come under attack and whether this will be the year where the tech titans battle the Chinese government and potentially receive some concessions. Perhaps other governments will join in. From my perspective, Google has really made good or at least is threatening to make good on its motto, “Don’t be evil.” Details

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