Inside Google and China Negotiation

In: Business and Management

Submitted By cathyzhang
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Inside the Google and China Negotiations
MGMT583N-Negotiation Research Paper Cathy Zhang

Google have experienced two series of negotiations with the Chinese Government from 2006 to 2010. The first round negotiation settled successfully when Google first entered China in 2006. Google established a local domain (google.cn) to better serve the mainland China Internet users when it failed to acquire a stake in the Chinese top search engine company Baidu. However, in January 2010, David Drummond, Google’s Senior Vice President posted “A new approach to China” on their official blog, threating to pull out of China due to a series of cyber-attacks and excessive censorship on search results.This negotiation concluded in July 2010 when Google had redirected google.cn queries to Google.com.hk, where uncensored search delivered via servers in Hong Kong. This research paper is aimed at discussing the two rounds of negotiations from both Google’s and Chinese Government’s perspectives.
Google’s Perspective From a Silicon Valley start-up to one of the world’s Internet titans, Google would never be satisfied limiting its business in the U.S. market. In 2006, China has 111 million Internet users, the second highest Internet population right after the United States. At this point, Google’s strategy to enter China must be profit-driven. From the second quarter of 2006 to the fourth quarter of 2009, Google’s market share in China has increased from 16 percent to 36 percent. Although revenues in China in 2009 were estimated at $300 million, less than 2 percent of total revenue, Google’s business was flourishing. More importantly, the Chinese search engine market had grown to $1 billion by 2009 which Google can’t let go so easily. In addition to its financial goal, Google strives to build its brand by “providing the best user experience possible.” Although users in…...

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