Can Google Fly With The Dragon This Time?

Google exited China eight years ago with all the controversies and disappointments. In 2018, the technology giant is rolling back to this country with “Project Dragonfly”. Will this time be different?

 

What is “Dragonfly”?

Chief Privacy Officer Keith Enright confirmed the existence of Project Dragonfly in the Senate hearing on data privacy last Wednesday. Though he claimed that the details and scope were not clear to him at this point, The Intercept reported earlier in this month that the project is a censored search app specifically for China, which would blacklist websites on human rights, democracy, religion and other issues deemed sensitive by the Chinese government.

 

Why is the Chinese market so attractive?

When Google was in China prior to 2010, it had 14% of China’s search traffic and 33% revenue share. Additionally, China hosts the largest online community in the world (753 million mobile internet users) according to the China Internet Report. Kitty Fok, managing director at IDC China, says that by entering China’s online search market, they will be able to collect new and fresh data that could help them with the development of other domestic internet services. Neil Wang, Greater China president of the consulting firm Frost & Sullivan also commented, “The Android app market in China is lucrative, so there might be tremendous opportunities for Google to explore.

Based on 2018 Q2 report from Google’s parent company Alphabet and the comments from Ruth Porat (CFO of Alphabet and Google), the second wave of growth will still have major focus on cloud computing. In 2017, the market value of public cloud service in China was above 4.4 billion USD. According to the official three-year cloud computing development plan (2017-2019), the market size is expected to be more than 88 billion USD by the end of 2019. Amazon and Microsoft had already been part of the ecosystem in Chinese cloud service through cooperation with the local providers. Can Google use Dragonfly as tipping point to trigger deeper cooperation and growth in Chinese market?

 

The Pressure, Risk and Next Step

Seven top Google engineers resigned since this announcement. 1,400 employees and 14 human right association initiated an open letter to protest this decision, pressing Google to “safeguard against human rights violations”. In the open letter from Dr. Jack Poulson, Senior Google Scientist, he stated that “I was compelled to resign my position on August 31, 2018, in the wake of a pattern of unethical and unaccountable decision making from company leadership. This culminated in their refusal to disclose information about Project Dragonfly, a version of Google Search tailored to the censorship and surveillance demands of the Chinese government.”

 

In June 2017, the Chinese government placed additional restrictions on internet freedom, including bans on disseminating news without a permit on social media. Under the governance of Prime Minister Xi, China has advocated “cyber sovereignty”, which pushes for countries to maintain control over how its population uses the internet within its borders. Based on the information we have so far, Dragonfly will be an application that is tied to personal cell phone number. Will this project become another seed to foster the efforts of government control and monitoring? Will Google be able to justify the controversial and risky decision? It’s certainly going to be a huge bet for this $745 billion giant.

 

Sources:

Gizmodo

The Intercept

The Guardian

CNBC

Featured Image from EM360Tech