Grading Google's China compromise

As my colleague Cecilia Kang posted earlier this morning, Google's google.cn Web site can stay up in the People's Republic of China.

That country's communist government renewed Google's license to operate the site after Google stopped redirecting all visitors to its domestic google.cn site to its Hong Kong-based google.hk. Now, as Google explained in a blog post last month, google.cn provides only limited services, such as music and text translation, and those users who want to search the Web can click on google.cn's prominent google.hk link--or just about anywhere else on that page.
Hong Kong, as part of an agreement negotiated before Britain handed over its former colony to China in 1997, operates under a different legal system that affords more freedom of speech.

Now that Google has announced the end of this stalemate--in a Twitter update pointing to the updated copy of that June blog post--it's time to evaluate its conduct.

One way is relative: How do Google's actions compare with those of other U.S.-based search engines? Yahoo's Chinese site, owned and operated by a local Internet firm, Alibaba, and the Chinese version of Microsoft's Bing site each censor search results as required by the government. Neither has opted to limit their in-country operations to avoid having to submit to those rules.

Another way is absolute: The PRC's government does not respect the fundamental human right to freedom of speech (among others), Google could have registered its dissent most powerfully by walking away entirely, but did not, therefore Google wimped out.

I don't buy the second interpretation. Google remains a for-profit company, and by pruning its domestic site to a stub of its former self--remember, too, that China can still block google.hk from its citizens--the company risks ceding a large chunk of the market to U.S. competitors and Baidu, the Beijing-based firm that dominates search in China. (How long until somebody decries Google's management for being bad capitalists?)

You may disagree, and if so I'd like to know why. Please share your reasoning in the comments.

(Meanwhile, you might want to take a few minutes to read about a different Internet-filtering case--the government of Australia just backed down on a plan to require Web firms to block access to allegedly harmful sites on a government-run blacklist. Google and Yahoo, as well as local Internet companies, lobbied against that scheme and forced a one-year delay in its implementation.)
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