Google Threatens To Pull Out Of China Over Cyber Attack

Wow. This could be huge. According to numerous reports Google is threatening to pull its search engine out of China after the company uncovered a massive cyber attack on its computers, which it says originated there. From the NYT:

Google threatened late Tuesday to pull out of its operations in China after it said it had uncovered a massive cyber attack on its computers that originated there.

As a result, the company said, it would no longer agree to censor its search engine in China and may exit the country altogether.

Google said that a primary goal of the attackers was accessing the Gmail accounts of Chinese human right activists, but that the attack also targeted 20 other large companies in the finance, technology, media and chemical sectors.

From a blog posting by David Drummond, the corporate development and chief legal officer, Google:

We have taken the unusual step of sharing information about these attacks with a broad audience not just because of the security and human rights implications of what we have unearthed, but also because this information goes to the heart of a much bigger global debate about freedom of speech. In the last two decades, China’s economic reform programs and its citizens’ entrepreneurial flair have lifted hundreds of millions of Chinese people out of poverty. Indeed, this great nation is at the heart of much economic progress and development in the world today.

**

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.

It’s not clear whether Google will pull out completely — and if they do will Yahoo and MSN et al. be pressured to follow — or what will happen if they do. In the meantime it’s interesting to note that image searches for “Tiananmen” are apparently now showing up again on Google.cn.


Google Considers Pulling Out of China Four Years After Grand Entrance

Google is reporting through its Chief Legal Officer David Drummond that it's ending the censored version of its site in China, and considering pulling out of the country.

This is a gripping development.

Google's so big, they almost face the same dilemmas as a country trying to trade with China -- almost.

Summing up, purists argued that Google shouldn't go in in the first place, and certainly in our response in January 2006, we felt Google was being naive, but agreed that there was complexity in trying to initiate political change by being open to a partner that was far from perfect. We added that if it didn't pan out, they could leave. We figured they could set a time limit, then leave if the human rights situation didn't improve.

Six months after that, Sergey Brin was already expressing misgivings, and no doubt the company has been thinking about the relationship ever since.

Although the current shift in policy seems to be triggered by episodes of Chinese government hacking and espionage to spy on human rights advocates, no one episode need to explain the desire to pull out; certainly it doesn't seem like this is the only issue at hand.

Indeed, the US government has been alarmed at widespread security breaches of the Pentagon and other federal institutions dating back to at least 2007, clearly traceable to China. The early denials by China have given way to regular confirmations from well-placed security experts.

Google, as a private company, turns out to have the luxury of pulling out of a country if it doesn't like their policies. They can even chalk it up to "regulations" that make it "hard to do business," if they wish.

So, Google isn't a nation-state just yet. While there will be forgone revenue, the repercussions are likely to be relatively mild, and Google answers to its shareholders, stakeholders, and customers.

2009 Was a Terrible Year for Free Speech Online

2009 was an unprecedented year for online repression.

For the first time since the Internet emerged as a tool for public use, there are currently 100 bloggers and cyber-dissidents imprisoned worldwide as a result of posting their opinions online in 2009, according to Reporters Without Borders. This figure is indicative of the severity of the crackdowns being carried out in roughly 10 countries around the world. (In one example, Burma handed out long prison sentences to online dissidents.)

The number of countries pursuing online censorship doubled in the past year -- a disturbing trend that suggests governments seek to increase their control over new media. In total, 151 bloggers and cyber-dissidents were arrested in 2009, and 61 were physically assaulted.

The crackdown on bloggers and ordinary citizens who express themselves online comes at the same time that social networking and interactive websites have become extremely popular, not to mention powerful vehicles for free expression.

China Still Leads in Online Censorship

China was once again the leading Internet censor in 2009. Countries such as Iran, Tunisia, Thailand, Saudi Arabia, Vietnam and Uzbekistan also blocked websites and blogs, and engaged in surveillance of online expression. In Turkmenistan, for example, the Internet remains under total state control. Egyptian blogger Kareem Amer is still in jail, while the famous Burmese comedian Zarganar still has 34 years left on his prison sentence. These are but a few examples.

The list of approximately 120 victims of Internet censorship in 2009 also includes leading figures in the defense of online free speech, such as China's Hu Jia and Liu Xiaobo, and Vietnam's Nguyen Trung and Dieu Cay.

People are usually targeted because they speak out on political matters, but the global financial crisis is also on the list of subjects likely to provoke online censorship. In South Korea, a blogger was wrongfully detained for commenting on the country's disastrous economic situation. Roughly six people in Thailand were arrested or harassed just for making a connection between the king's health and a fall in the Bangkok stock exchange. Censorship was slapped on media in Dubai when it came time for them to report on the country's debt repayment problems.

Overall, wars and elections constituted the chief threats to journalists and bloggers in 2009. It is becoming more risky to cover wars because journalists themselves are being targeted for murder and kidnappings. It's also just as dangerous for reporters in some countries to do their job at election time. Journalists have ended up in prison or in a hospital thanks to their election reporting. Violence before and after elections was particularly prevalent in 2009 inside countries with poor democratic credentials.

Iran Election Crackdown

Iran saw the most violence, censorship and arrests due to an election. Its elections this past summer saw more than 100 arrests, and many prison sentences handed down. The country, which is on the Reporters Without Borders list of "Enemies of the Internet," has also deployed a sophisticated system of Internet filtering and monitoring, especially in recent months. The country's main ISPs depend on the Telecommunication Company of Iran, which recently came under control of the Revolutionary Guard, and does not hesitate to flout international treaties or to restrict the free flow of information.

Within hours of the announcement of President Mahmoud Ahmadinedjad's election "victory," journalists were being arrested by the intelligence ministry, Revolutionary Guard, and other security services. Most were taken to Tehran's Evin prison. At least 100 journalists and bloggers have been arrested since June, and 27 are still being held. Today, Iran is one of the world's five biggest imprisoners of journalists.

Since the election, national and international media in Iran have been subject to massive and systematic censorship that is without precedent. For the first time since the 1979 revolution, the security services are vetting the content of newspapers before they're published.

The Iranian regime's offensive against online free expression took a new direction in December after Tehran prosecutor Abbas Jafari Dowlatabadi announced he was going to prosecute two conservative websites for "insulting" Mahmoud Ahmadinejad.

Meanwhile, several Internet service providers cut access to prevent political opponents from disseminating information during opposition demonstrations on December 27. After the demonstrations, the intelligence ministry and Revolutionary Guard began rounding up government opponents and journalists, arresting an estimated 20 people in the latest wave. Those targeted included a dozen or so journalists and cyber-dissidents. Alireza Behshtipour Shirazi, the editor of Kaleme.org (opposition leader Mirhossein Moussavi's official website), was arrested at his Tehran home and taken to an unknown place of detention.

Trouble in Democratic Countries

Democratic countries have also enacted online censorship. Several European nations are working on new steps to control the Internet in what they say is a campaign against child porn and illegal downloads. Australia is also planning to set up a compulsory filtering system that poses a threat to freedom of expression.

Communications minister Stephen Conroy announced in December that, after a year of testing in partnership with Australian Internet service providers, the government will introduce legislation imposing mandatory filtering of websites with pornographic, pedophilic or particularly violent content.

Google Australia's head of policy, Iarla Flynn, raised concerns, saying, "Moving to a mandatory ISP filtering regime with a scope that goes well beyond such material is heavy-handed and can raise genuine questions about restrictions on access to information." In a Fairfax Media poll of 20,000 Australians, 96 percent strongly opposed a mandatory Internet filtering system.

Yet that proposal -- as well as many others around the world -- continues to move ahead. Hopefully, 2010 will be a better year for free speech online.

Clothilde Le Coz has been working for Reporters Without Borders in Paris since 2007. She is now the Washington director for this organization, helping to promote press freedom and free speech around the world. In Paris, she was in charge of the Internet Freedom desk and worked especially on China, Iran, Egypt and Thailand. During the time she spent in Paris, she was also updating the "Handbook for Bloggers and Cyberdissidents," published in 2005. Her role is now to get the message out for readers and politicians to be aware of the constant threat journalists are submitted to in many countries.

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China Will Get Its Own Hulu Lookalike

While the market for user-generated content in China is still rapidly growing, with major investments being made in video sharing sites like Youku, the country could also get a major premium video aggregator soon. As first reported by Reuters and confirmed by paidContent, Chinese search giant Baidu is teaming up with one of Hulu’s investors to create a new web site for licensed online video.

Providence Equity Partners, which joined the Fox Broadcasting and NBC Universal joint venture Hulu with a $100 million investment in 2007, has reportedly agreed to invest $60 million in private equity into the new Chinese venture, with Baidu putting up an additional $10 million (although a paidContent source disputes the amount Providence invested). Unlike Hulu, which now counts Fox, NBC, and Disney as stakeholders, Baidu will remain the only other partner in the firm.

Like Hulu, the new site will probably seek to license video content from Chinese providers and offer it up to viewers on an ad-supported basis. According to the Reuters story, the venture already has a chief executive to run the new company in mind — Gong Yu, a senior executive from China Mobile who recently resigned.

The new unnamed venture isn’t Baidu’s first investment in online video; the search company also has a stake in PPLive, the P2P-based live streaming platform in China, which enables users to have access to free movies. PPLive is one of the largest P2P video-streaming platforms in China, with some 20-30 million active monthly users and an install base of more than 100 million users.

Youku Raises $40M, Might Add Another $40M

Youku

Youku.com

While the shakeout in the online video market has already occurred in the U.S. with YouTube reigning supreme over other sites, in China it’s a different story — which is why Chinese video site Youku.com was able to raise $40 million in a funding round announced yesterday, and may be looking to bring on an additional $40 million in financing.

The new round was led by Chengwei Ventures, with existing investors Brookside (Bain) Capital, Maverick Capital and Sutter Hill Ventures also participating. So far, Youku has raised $110 million, including $30 million with an additional $10 million loan in its last financing round in June 2008.

The online video industry in China is still fairly wide open, in part due to the government’s aggressive stance against global online video leader YouTube. But Youku seems to be in a good position to capture a larger share of the market with the new funding.

The company says it works with more than 1,500 content license holders and has attracted over 350 brand advertisers so far. It had 149 million unique visitors from home or office PCs in October, with another 57 million viewers accessing the site from Internet cafes, according to research firm iResearch. Youku’s revenue for 2009 is projected to be RMB 200 million ($29.3 million).



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