04
Sep
2009

Google China’s Kaifu Lee Resigns

According to sources on Twitter (tweet by leading Chinese blogger keso with information confirmed by phone with Kaifu Lee, tweet via niubi), the founding president of Google China Kai-Fu Lee (Li Kaifu,  李開復;  李开复) has resigned from his position effective immediately.  We have seen no news on the reasons why, although there are rumors that he is starting a new venture to help young entrepreneurs (source: RockyFu on Twitter).  The rest of this post just summarizes recent events related to Google and blogger attitudes toward Google after the porn incident.

UPDATE:  Chinese portal Netease creates a whole dedicated Kaifu Lee site section.  (source: @rmack).  Netease reports that sources say Kai-Fu Lee will set up a new venture fund to help young Chinese  entrepreneurs. More updates below.

kaifu_lee

Kai-Fu Lee - photo CC CNReviews.

Illustrious career

Kaifu Lee had a illustrious career at top US software companies before founding Microsoft Research China in 1998, which is widely considered a success.  He joined Google in 2005 and a widely reported legal squabble ensued between Microsoft and Google over his ability to work for Google without disclosing proprietary information and trade secrets.   The case was settled in Google’s favor but with some restrictions.

Google China seemed to be gaining ground

The resignation is puzzling because it appears that Google China was slowing breaking into the market dominated by Baidu.  Kaifu Lee has famously spoken of a 1000 year perspective, characterizing Google’s approach toward China as patient and committed to the long-term.  Its clear that this attitude is a key factor for success in China.  Most recently, Google China had been picking up share in China’s growing search engine market.  From Business Week on June 8:

Google boosted its share of the fast-expanding China search business by three percentage points in the first quarter as the market boomed. Google took 32.8% of search revenues, up from 29.8% in Q4 and 25.8% a year ago, according to iResearch. However, its share of total searches fell to 20.9% from with 23.0% in Q4. Its share was 18.7% in Q1 2008.

Additionally, Google was growing share in a growing market.  Research firm iResearch estimated that the search engine (revenue) market grew by 35.7% in Q2 of 2009, vs Q2 2008:

iResearch China Search Engine Market Source: iResearch (More research on the search engine market can be found on the iResearch website.)

Could the recent attack from Chinese regulators have been a cause?

We have absolutely no evidence or source linking the resignation with the recent dispute over porn in Google’s search results. However, it is the most recent public, negative incident affecting Google in China.  On June 18, Chinese regulators Chine Internet Illegal Information Reporting Center (CIIRC)  issued a condemnation on Google for allowing porn to be found.  Global Voices Online’s Oiwan Lam summarized and translated this condemnation.

On June 18th, China Internet Illegal Information Reporting Centre (CIIRC) published a report in its frontage condemning Google.cn for spreading obscene contents. The report, titled as “Strongly condem google for spreading indecent and obscene information”, said:

互联网违法和不良信息举报中心近日根据公众举报并经核查,“谷歌中国”网站(google.cn)大量传播淫秽色情和低俗信息,严重违反国家有关法律法规,违背社会公德,损害公众利益。

(Recently the CIIRC had received and verified public complaint against google.cn for spreading obscene and vulgar information in massive scale. Such act has seriously violated the government’s relevant regulations. Moreover, it is against the society’s public morale and interest.)

The timing of this attack may have been motivated by the controversy around the government’s intent to force PC manufacturers to install the Green Dam Youth Escort software to filter pornographic sites.  (If you forgot about this whole controversy already, CNReviews’ Kai Pan provides an easy 12 point review of the entire situation including the embarrassing CCTV journalism where they are outed for using a summer intern as a “man on the street” interview.  More on the Green Dam incident at Rebecca MacKinnon’s RConversation. )

Time reports on the Google porn matter and highlights Rebecca MacKinnon’s theory that the timing of this criticism is related to the efforts to roll out the Green Dam filtering software:

The attack on Google is seen by some as an attempt to divert criticism from the controversy over filtering software. “It doesn’t seem like a coincidence that [the attack on Google] comes amid mounting criticism of Green Dam, whose ostensible purpose is to block porn,” says Rebecca MacKinnon, a former Beijing bureau chief for CNN who is writing a book about the Internet in China. “Now they’re trying to show what a bad job Google does in protecting China’s children.” MacKinnon also notes that there’s plenty of evidence that searches conducted on Baidu — Google’s main rival in China and the company with by far the biggest share of the search-engine market — produce just as many or more links to pornographic sites.

Could strained relations between Google China and various agencies regulating the internet (such as the Ministry of Information Industry and the Ministry of Public Security) have caused Google to set up Kaifu Lee as the fall guy?

Why Google and not Baidu? Life isn’t fair (and Netizens will find porn, some way, some how)

An interesting side point that many people on Twitter made during this period was that Baidu was just as guilty as Google in allowing for porn access.  Danwei highlights a post (zh) by Chinese blogger Wang Xiaofeng who compared searches on Baidu and Google for “Japan, Navigation” (日本 导航) and “Korea, Navigation” (韩国 导航) with “interesting results.”  The interesting thing is that Google had filtered much more porn than Baidu on these terms.  Wang shares some other conspiracy theories related to Robin Li’s appearance on state-run television, and suggests that he holds “home court advantage” in some way.   Danwei also highlighted some interesting stats from Keso on Baidu’s Japanese search engine:

Keso, king of China’s IT bloggers, recently posted the following information:

Baidu.jp users come from these countries:China 55.9% Japan 38.4% Hong Kong 1.4% United States 1.4% United Kingdom 0.7%

The reason Baidu Japan has so many Chinese users can only be that they’re looking for stuff they can’t find on Baidu’s Chinese site.

What could all those Chinese netizens be looking for on the Baidu Japan site?  Hmmm…  Asia Sentinel concludes that Online China Goes to Japan for Porn.

BloggerInsight survey of Chinese Bloggers: Google Needs to Behave to Succeed

CNReviews and partner BloggerInsight surveyed Chinese bloggers to see what they thought.  We published the results here.  BloggerInsight asked the following questions:

  1. Why was Google singled out?
  2. How do you see this incident affecting Google China’s strategic palnning and user trust
  3. How will this effect the way other international companies operate in China

The full results of the mini case were blogged over here.  If you want more information beyond what is in the post, please contact us and we’ll introduce you to BloggerInsight.

Five reasons why Google was singled out

BloggerInsight crowdsourced five key insights into why Google was singled out.  Here are some excerpts from the surveys: First, it was Google’s fault for linking to a huge amount of inappropriate content. When Google was launched in China, they knowingly entered into an agreement with the Chinese government in which they would do their utmost to make pornographic and indecent material inaccessible to the public. Clearly, Google had broken this agreement by linking to a great deal of pornographic material.

In the pursuit of profit and visitor maximization, Google’s system automatically associates and links certain keywords with pornographic content so that more visitors will use it as their preferred search engine. Based on visitors’ popular searches, it must come as no surprise that search results yield large amounts of inappropriate material.

Teenagers can easily find a lot of pornography through Google, and this kind of content is not allowed in China.

Secondly, Google is a big, international company.

There is a pretty good reason for Google to be singled out in this situation. As a well-known foreign company, Google represents a significant share of the market in China. After a series of campaigns forcing local sites to overhaul their webpages to eliminate inappropriate material, this campaign can be viewed as the Chinese government exerting pressure on international sites. Here, Google is a symbol by which the Chinese government proclaims a job well-done on cleaning up things on the home front and sends a clear message to international sites that they can’t get away with indecency.

The attack on Google may have arisen at this point because the government wanted to take some of the spotlight off the controversial Green Dam order. At the same time, by taking on a company with as much clout as Google, the Chinese government sends a clear message to corporations about their resolve and intentions for the Green Dam.

Thirdly, Google was not fully complying with the Chinese government’s internet control policy, and hasn’t been fully cooperating with government when disputes and controversies arose.

Google has always been unwilling to be investigated and blocked by the government when it comes to many issues such as Gmail.

Applications such as Google Reader and Google Documents are useful platforms for users to easily share information that the government does not approve of.  Google is adamant about providing comprehensive https services to ensure the security of SSL encryption, which makes it more difficult to be blocked by the GFW.

Fourth, Google does not run advertisements on CCTV. Google is not obligated to buy airtime on media outlets such as CCTV. Exposing that fact to the public will not influence medias’ revenues and cooperation with other advertising partners.

CCTV has no need to promote Google, because CCTV doesn’t get any ad revenue from Google, so CCTV has nothing to lose in reporting that Google’s not a “socially responsible” company. In the past, CCTV featured a story on the fake ads on Baidu. After Baidu spent over 40 million RMB on ads with the network, all the bad press went away.

What’s more, a couple of negative news stories about CCTV were revealed on the internet, including the one about CCTV terminating contracts with over 1,600 of part-time or temporary workers after the New Labor Law took effect in 2007 . CCTV’s negative news can’t hide on the internet.

Fifth, Google is an advanced search engine and is the only search engine that provides comprehensive international content to Chinese netizens.

As the largest search engine website, Google controls enormous amounts of information and data. Compared to other domestic search engines, which mainly focus on Chinese results, Google provides information from beyond China. Consequently, as long as the government wants to supervise the internet, Google will definitely be the first targeted one.

If not Google, who else? Only Google meets the conditions for this kind of assault. Additionally, there is a rumor that Google.cn’s market share has been growing, so Baidu was one of “black hands” behind this incident.

Best wishes to Kaifu Lee

Could Chinese government persecution of Google over porn access have caused Kaifu Lee to resign?  We’ll update this post with more news as we get it.  In the meantime, we offer best wishes to Kaifu Lee and expect him to surface in another important role bridging international technology companies with the Chinese market.

UPDATE:  Wall Street Journal just confirmed the news.

UPDATE: China Internet Watch (Rocky Fu) highlights news from Tencent that Liu Yun, a vice president at Google, steps in as interim president of Google China:

Liu Yun, vice president of Google worldwide will temporarily take the post of president of Google Greater China, in charge of the Chinese market.

liu-yun

Dr. Liu Yun joined Google last January, as a global vice president in charge of Greater China sales. Based in Beijing, he is responsible for Google sales and channel business in mainland China, Hong Kong and Taiwan.

Prior to joining Google, he served as CEO of SK Telecom and President for China market. He also used to work in FreeMarkets (US) and SingTel (Singapore) in senior management positions.

UPDATE: from the New York Times via China Internet Watch:

Google said in a news release early Friday in Beijing that Mr. Lee, who was president of Google Greater China and vice president for engineering, would leave the company in mid-September. Two current executives will take over Mr. Lee’s engineering and sales roles. Boon-Lock Yeo, currently director of Google’s Shanghai engineering office, will take over engineering responsibilities for Google China, and John Liu, vice president of sales and operations, will assume business and operational responsibilities.

UPDATE:  On Twitter, Kai Fu Lee tells people to back off and give him a week before he announces anything further:

kaifulee: 请大家不要乱猜测我要做什么。下星期宣布。不是卖关子,是有些细节还没有搞定。给我一点时间和耐心。保证是很酷的。谢谢大家的支持

He also debunks the rumor about starting Idealab China:

kaifulee: 请不要乱说我加入IdeaLab。我不加入任何公司,我会自己做一个青年创业平台。下星期会给大家更多信息

He also posts about his departure, quoting Steve Jobs, on his popular blog on Sina (zh). The post is entitled “Goodbye, Google

UPDATE: CNReviews makes it onto TechMeme!  First time ever.

techmeme_kaifulee

Spread the word:
  • Digg
  • Mixx
  • Reddit
  • StumbleUpon
  • Haohao
  • del.icio.us
  • Technorati
  • Facebook
  • LinkedIn
  • Google Bookmarks
  • Netvibes
  • Print
  • email
  • RSS
  • Twitter