Martin Pyykkonen, senior executive director for Internet, media and communications at Global Crown Capital, told CNBC’s “Street Signs” that Google is betting that censorship in China eventually ends.
“Most of what’s banned in China is not of a commercial nature,” he said Thursday. “Google makes its money from paid search advertising and clicks. They have to self-censor some of the things that are sensitive to the Chinese government, but (if) they can still have a pass-through on the things that are commercial, they’d be willing in the short term to put up with that. I think Google is probably making the bet that long-term Chinese government regulation and changes will occur – it may be quite a few years – that censorship will go away.”
Pyykkonen said Google can’t walk away from China now and hope to re-enter the market in the future. China is not a key element to Google’s earnings now, but will become more important in the future.
Terms that can’t now be searched in China include: Armageddon, Falun Gong, Horseracing, Tiananmen Massacre; wiretap, nuclear bomb, red terror and wiretap.
Orville Schell, director, U.S.-China Relations at The Asia Society, said Google has “taken a real hit” by agreeing to censor search terms in China, especially becasue the company's motto is “Do no evil.”
“I think it’s a very difficult situation for Google,” Schell said. “I think they’d like to get this situation resolved. I think there’s an effort now for Google and other companies to establish minimum standards of transparency. If searching in China for ‘democracy’ or ‘human rights’ and it didn’t come up, you’d be told why and have the law cited.”