my trip to China last May when I accompanied Sarah Lacy and met with startups and VC and lots of old friends in Beijing. Her post earlier this evening that second guessed the motives for Google's proposed exit, and whether or not human rights concerns played a significant role made me rethink what was going on, particularly in the mobile industry in China.
1) Google does not host personal data on servers in China. UPDATE: I initially thought Google had no servers in China, learning from Yahoo, who was first in China subject to Chinese jurisdiction and forced to hand over information from dissidents. But I've learned from a more credible source on China, Jeremy Goldkorn from his Guardian Post that Google apps like Gmail are specifically the ones not hosted in China because they carry personal data which if they were on Chinese equipment would be subject to confiscation at the whim of the Chinese government.
2) Google's strategy for music streaming partnerships in China pre-dates the recent launch in the US. In October '09, US Google users gained access to streaming Lala and MySpace tracks in popups from song title searches. After meeting with Gary Chen of Top100.cn (part of Orca Digital) I saw that Google's attempt to not be evil and continue to compete pushed them to use 3rd party hosters who had Chinese servers and therefore the Chinese 'rights' to serve up questionable content like free music. This strange relationship was the precursor to the US, cloud-based, music partnership strategy, because in China, Google needed mp3 search to effectively compete with Baidu. The reason the fight between Google and Baidu over mp3's was so much bigger than Google and Apple's (and Apple's purchase of Lala) in the US over cloud-based music access is that all of the tracks accessed on Baidu or google.cn in China are free to download, so this was one of the main battlefields for China's biggest search engine - not for biggest music licensing market share.
3) Google spent something like 2-3 years negotiating to become China Mobile's default search engine on mobile phones. I thought initially that Google could have opened up g.cn for mobile phones to include mp3 search, and thereby create a huge advantage over Baidu. I thought Google Listen + Android would let users download free songs like they do on the desktop. However, Google was interested in keeping the China Mobile search deal, and they now had a way to keep China Mobile happy, by giving them a free, customizable mobile operating system in Android that would let China mobile charge for mobile music downloads (see my coverage in Business Insider here).
I have no idea how the mobile landscape will change without Google in China. Android is at the precipice of taking off in China, but is there a way for those devices to still win market share without Google apps? Will Baidu get Google's China mobile search deal by default?
Also, and more importantly, is Google giving up the good fight? Will human rights be best served if mobile devices, already a great liberator of tyranny in Africa and the best hope for clearing up the opacity of governance in Iran, lose their default search and software provider, Google in China?