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China behind cyber attack on 30 plus U.S. companies?

http://www.dailyfinance.com/story/company-news/google-gets-u-s-back...

After a cyber attack targeted at over 30 U.S. companies. Google and others are looking at reassessing their business operations in China after evidence that the attack was perpetrated by an organization working on behalf of or directly for the People's Republic of China.

China's stance towards censorship, puts foreign companies in an interesting position. Google; for example, has decided that they will not abide by China's dictates around censorship, while others like Microsoft, have indicated that they will comply.

I'd be interested in getting people's general thoughts on this as the story unfolds, but specifically, I think it would be an interesting discussion to talk about what this means for companies doing business and wanting to do business in China. With U.S. Ambassador to China Jon Huntsman indicating that, China based attacks on government computers have been "ongoing for a long time." It makes one question the safety and security of the digital information being generated and used by these companies.

Cyber attacks are nothing new, and something that companies have to position themselves against, but what does it mean when it's the sponsoring government perpetrating the attacks?

I'd be interested in getting your thoughts.

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I understand Schmidt's argument that, "some Google is better than no Google" and that its best to try to cause change slowly from within, but after observing these incidents, it looks like Brin was right from the beginning. This latest attack on US companies and, worse, massive numbers of Chinese human rights activists is beyond the pale. Clearly the Communist Party (not to be confused with the Chinese people), is thumbing its nose at Google.

It may be that the Party wants Google out anyway to make more room for homegrown Baidu, which already controls over 60% of the market. Baidu's #1 competitor? Google China.
Its interesting to see all the people putting flowers on Google China's entrance sign (grave?) From ziboy (check out the
ziboy post for more photos of people's reactions):
It looks like some Chinese don't want to see Google go.
"This conflict isn't really about the great firewall," Bremmer said. "It's much more fundamental. [It's about] the relationship between corporations doing business in China and the Chinese government."

http://www.dailyfinance.com/story/company-news/google-delays-china-...

It's interesting to watch this one play out.
It's interesting how Google brought this out in the open.. without getting too involved in 'political' negotiations. Given Google's expanding presence around the world, they seem to be in a pretty good position to make such a brave move, considering that China sports one of the largest online communities.

As a purely economical question, can Baidu really replace everything that Google has to offer? Could China possibly be loosing out without Googles presence?
I don't think China's government will back down. The question is, how much will it hurt them when Google leaves? Are they just removing search? I wonder if Chinese businesses will still be able to use Google Apps. Baidu doesn't have all the applications Google offers. If they are removing everything the Chinese government will have to deal with a lot of unhappy businesspeople!

Konstantin A Lukin said: As a purely economical question, can Baidu really replace everything that Google has to offer? Could China possibly be loosing out without Googles presence?
I don't know about that. I think that that things are only going to get worse in terms of China's response. I don't get the sense that they're going to back down. They've called Hillary Clinton's comments disrespectful, and have went on to say, "On the Internet question, China doesn't need any lessons from the United States on what to do or how,"

I think this situation is going to get worse before it gets any better. Beyond that, I tend to think that China is not the cash cow that many US based companies believed it would be. For all the controversy around Google, their business in China reportedly only represents 2% of their overall revenue. I understand that other internet and media based companies doing worse. Google had; from what I understand, 30% market penetration and others have certainly not been as successful.

To be completely honest, the situation makes me somewhat nervous.

Mika Leuck said:
I don't think China's government will back down. The question is, how much will it hurt them when Google leaves? Are they just removing search? I wonder if Chinese businesses will still be able to use Google Apps. Baidu doesn't have all the applications Google offers. If they are removing everything the Chinese government will have to deal with a lot of unhappy businesspeople!

Konstantin A Lukin said: As a purely economical question, can Baidu really replace everything that Google has to offer? Could China possibly be loosing out without Googles presence?
Hi Kimo - You bring up a good point. While China recently surpassed the US in terms of the total number of web surfers, they spend far less online than their US, Japanese and European counterparts. This will undoubtedly change over time, but a lot of companies jumped the gun based solely on head count.

Google is big enough to take a 10 to 20 year view. I don't think they were expecting big profits this year or next.
From a friend currently traveling in China: "Google docs were not available in any city I visited - ShangHai, Shenzhen and Beijing. I am in HongKong right at this moment, just checked, the docs are working here :-)"
Daniel Leuck said:
From a friend currently traveling in China: "Google docs were not available in any city I visited - ShangHai, Shenzhen and Beijing. I am in HongKong right at this moment, just checked, the docs are working here :-)"
And that is the other thing. If Google pulls out, what are the alternatives to cross-border information exchange for small businesses? Google docs provides a very nice media format, if such tools are not readily available, it could potentially have a sizable impact on economic growth down the line.. (theirs and ours)

On the other hand, in general, I think a healthy business exchange is good for politics, and the fact that China is not willing to eagerly participate means there are deeper (cultural?) problems that are not being openly discussed at the moment (why?).. where I tend to agree with Kimo, is also making me a bit nervous.
Daniel Leuck said:
Hi Kimo - You bring up a good point. While China recently surpassed the US in terms of the total number of web surfers, they spend far less online than their US, Japanese and European counterparts. This will undoubtedly change over time, but a lot of companies jumped the gun based solely on head count.
From what I hear, I think this has a lot to do with their censorship of information. If the only thing one could search for is what your government thinks is 'good for you', then I would not spend much time online either.. :) My question is why are they censoring? What are their main concerns?
Chinese scientific community expressed their opinion about Google stance. Here are some of the things they had to say:

A Nature News survey of Chinese scientists found that 84 percent of them thought losing access to Google would “somewhat or significantly” hurt their work process. Like their American counterparts, Chinese researchers use Google and Google Scholar to find papers and related information.

“Research without Google would be like life without electricity,” one Chinese scientist told Nature.

"If events do continue in that direction, truly global enterprises like science could suffer as information becomes harder — even if only moderately — to exchange"

And the big question, asked by a media blogger:
“Is the Chinese internet going to be largely parallel? The othernet?”

Here is the full article:
http://www.wired.com/wiredscience/2010/02/china-scientists-google
We're putting together a lunch and learn type deal at our corporate offices in Utah with Google's first patent attorney and the one who took them to China. It'll be a pretty informal deal, but should be very interesting to get his take on everything that's happened and his thoughts on the future of Google specifically in China.

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