And there really wasn’t much real risk for Google here. They were far behind Baidu and weren’t generating profits in China that were material to their financials, so they have little downside and very high upside from their standing in the Western world. What Google may have to worry about in China is a merger between Baidu and Microsoft, rebranded as Baidu-Bing (rimshot sound effect). Who wouldn’t want to search on that site?

What does worry me relates to Ely’s note about Google not thinking it has to abide by China’s rules because they’re delivering content over the Internet. That is the slippery-ist of slopes. What if tomorrow they don’t want to play by France’s rules or Germany’s or any other states. Frankly, it’s a dumb position to take if it’s true.

I think it boils down to China and Google having competing business propositions: Google’s stated mission is to organize the world’s information, but China wants to control it’s own. This has all the makings of a Thunderdome match, but I don’t believe that Google can win on the existing playing field, nor do I believe that public opinion will make a whit of difference. It hasn’t affected China’s position on human rights, Tibet, Taiwan, why should Google fare any better?

Now the NYT’s Roger Cohen has a nice piece today (http://www.nytimes.com/2010/01/15/opinion/15iht-edcohen.html?partner=rss&emc=rss) that talks about China’s real problem with this situation: China’s economy is based on an open, global economy and at some point that’s going to require a open sharing of information. So they don’t have a sustainable position. But if something happens, it won’t be because of Google.

If you have principles, you need to hold them up right from the beginning, not just when your thief friend proves to be a thief , after all, not the person you were hoping to change him into, forever!

By standing up to China, Google is stating it’s opinion on the internet which is that it does not live in any physical location and thereby cannot be subject to local laws. China, obviously, feels differently and feels that the internet accessed in their country is subject to all local laws.

The implications of this will be seen dramatically as Baidu (already one of the most visited sites on the web) expands. A move like this from Google sends a signal to the rest of the world. Google will not compromise its values. Baidu, however, is in the pocket of the Chinese government. As these two companies grow and start to compete in more than just search in China, we may look back and view this move by Google as very strategic and not made purely on ethical grounds.