Yesterday, Google announced it’s new approach (read: dropped a bomb) towards China, and threatened to pull-out of the country owing to the dictatorial policies, excessive surveillance and ‘official’ cyber attacks

These attacks and the surveillance they have uncovered–combined with the attempts over the past year to further limit free speech on the web–have led us to conclude that we should review the feasibility of our business operations in China. We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China.

The decision to review our business operations in China has been incredibly hard, and we know that it will have potentially far-reaching consequences. We want to make clear that this move was driven by our executives in the United States, without the knowledge or involvement of our employees in China who have worked incredibly hard to make Google.cn the success it is today. We are committed to working responsibly to resolve the very difficult issues raised. – blog entry

And ofcourse, there are two schools of thought – one that praises Google for it’s ballsy move, and another that says Google is anyways not doing so great in China, so the announcement was merely a smoke and Google anyways wants to pull out of China.

Google China

Even though Google is not the number 1 search engine in China, they had a great year with $600mn annual revenue (38% market share) . Most importantly, China is a $10 billion opportunity which Google can’t let go so easily – I find it difficult to believe that Google will walk away of this opportunity.

This post will not attempt to analyze whether Google is right or wrong (is Google trying to become super-citizen and operate above the law?), or whether China is right or wrong, but this is an attempt to highlight the power of BATNA in negotiation strategy.

Google, probably tried out each and every means to get Chinese government to relax their surveillance and least to say, failed each and every time.

The blog announcement was probably the last BATNA that they’ve ever had.

What’s BATNA?

Better Alternative To Negotiated Agreement

BATNA is the course of action that will be taken by a party if the current negotiations fail and an agreement cannot be reached. BATNA is the key focus and the driving force behind a successful negotiator. A party should generally not accept a worse resolution than its BATNA. (more)

Google, by all means may not leave China, but look at series of events that have happened after Google’s announcement:

What has happened after Google’s announcement of their decision?

- US Secretary of State, Hillary Clinton has issued a statement

We have been briefed by Google on these allegations, which raise very serious concerns and questions. We look to the Chinese government for an explanation. The ability to operate with confidence in cyberspace is critical in a modern society and economy. I will be giving an address next week on the centrality of internet freedom in the 21st century, and we will have further comment on this matter as the facts become clear.

- Chinese Government has issued a public statement asking for more details from Google.

Now, it’s US vs. China, discussing Chinese censorship and government-sponsored cyberattacks – something that was never discussed.

So what did Google achieve in the entire story?

First time ever, Chinese government has been challenged publicly by an American company on censorship and privacy issue, which has also brought global attention to Chinese policies and a pressure on them to come out clearly on the policy.

What will Google gain out of this?

A higher moral ground and a level-hand in negotiation with Chinese Government (now they have the support of US government).

All I know is that when Google and Chinese government go back to the negotiation table, Google will have a better negotiation power than what it had till January 12th, Twenty10.

What’s your take?

Tags: google china