Page 40 - How China Is Winning the Tech Race

in technology, which was a prerequisite. It had a search algorithm that is more
relevant in Mandarin,” he explains.
But Google was not about to surrender. The battle peaked in the summer
of 2005, when Google set up an office in China and appointed Kai-Fu Lee as
its president. The high-profile hiring of Lee, a former Microsoft vice president
and head of the software giant’s research division in China and Asia, set off a
legal battle between Microsoft and
Google over a noncompete clause
“Baidu had a fundamental innovation in in Lee’s contract. That dispute was
technology, which was a prerequisite. It had settled by an agreement that the
a search algorithm that is more relevant in seasoned manager could have a
Mandarin.”
hands-on role in research at Google
Asad Jamal, only after a one-year hiatus.
chairman and CEO, ePlanet Ventures In January 2006, Google CEO
Schmidt traveled from Silicon Valley
to Beijing to put the company’s
muscle behind Google.cn (the cn
stands for “China”). This was a Mandarin-language search engine run from
China, not from California. Officially named Gu Gee and pronounced “goo-
guh,” the overhauled Google.cn translated as “harvesting” and had better
search capabilities in Mandarin. Searches were speedier and more reliable with
servers inside China, and engineers were hired by the dozen to figure out how
to make Google outperform Baidu in China. In June 2006, Google sold its
shares in Baidu for more than $60 million, a nice return on its earlier $5 million
investment.
But to set up business on Chinese soil, Google’s top management in the
United States had to agree to Chinese government censorship. That put
Google.cn on an equal footing with Baidu, which had been censored from the
start. Google had to wipe out politically sensitive and banned topics, going
directly against the Internet’s ideal of free expression and Google’s principles
of “do no evil.” Topics such as the 1989 student uprising at Tiananmen
Square don’t appear on Web pages in China.
Censorship of Internet sites in China is a hot political topic. Yahoo! has
come under fire on Capitol Hill for handing over the names of two bloggers.
One was sentenced to prison for eight years in 2003 for criticizing official cor-

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