Challenging China

Chinese surprise at Google pull-out threat

By Chris Hogg
BBC News, Shanghai

Google's warning that it might pull out of China over cyber attacks has surprised human rights activists here.

They seem unfazed that China is accused of trying to hack into their Gmail accounts. But a major foreign firm like Google being prepared to speak out and challenge the government so directly is unusual.

The Chinese authorities will be infuriated that Google has made its announcement before negotiations with officials have got under way.

China has so far said little publicly in response.

I would bet on a harsh reaction from the Chinese government
Dan Sefarty, Viadeo

An unnamed official quoted by the state news agency Xinhua said only that the authorities were trying to find out more about Google's suggestion it might leave the country.

The company's main Chinese rival Baidu is less reticent. In a blog post that has since been taken down, the firm's chief architect Sun Yunfeng claimed Google was just trying to play down its market failure.

"Would Google top executives still proclaim that they would 'do no evil'," he said, quoting the company's code of conduct, "and quit China if they had taken 80% of China's search market?"

Google's market share is estimated to be around 30% in China, about half the size of Baidu's, the search engine market leader.

The senior Baidu executive said the American company's move would "satisfy the imagination of those Westerners who have never been to China and understand nothing of China but still like to point fingers at China".

'Mismatch' in perception

Others in the technology sector here see this differently.

google.cn homepage ( archive image)
Gmail accounts of rights activists have reportedly been accessed

Dan Sefarty heads Viadeo, the firm that owns the Chinese social networking site Tianji.com.

"Google is rare," he says. "It's a US company succeeding in China. It has impressive market share and is atypical among other foreign companies who try to get into this very tough market."

He warns that Baidu has strong links with the government and may be lobbying hard to gain business advantage from this row.

"I would bet on a harsh reaction from the Chinese government," he says. "Look at what they have done with Facebook and Twitter, which have been blocked in China for six to nine months now."

Opinion is divided over whether or not Google really plans to withdraw from the country, the world's largest internet market.

Duncan Clark, an analyst at the Beijing hi-tech consultancy BDA, says he sees a "mismatch" in perception between the Chinese authorities and the foreign firms doing business here.

"People here think no-one can do without China, and I think now some companies are thinking no-one can deal with China," he told the French news agency AFP.

"There is a feeling that China is emboldened and that they don't need to have the same sort of dialogue [as before]," he said.

Google's senior US executives are well aware of the Chinese preference for gradual change, and also of the authorities' likely resistance on a matter of such ideological importance to them as control of the internet, an arena described by a senior public security official just a few weeks ago as a "battlefield".

Some analysts see Google's announcement as a gambit for what will be extremely tough negotiations with the Chinese, rather than an ultimatum.

But others suggest that the more Google bent towards the demands of the Chinese government, the more harm was done to its reputation overseas, and at some point it had to make a stand.

'Heroic' decision?

Whether you regard Google's market share as impressive or disappointing, compared to its dominance elsewhere, there is little doubt it is not a household name in China in the same way that it is abroad.

A Chinese flag flutters outside Google's China headquarters in Beijing
Google has about 700 staff in its China offices

But Hu Li, a student in Beijing, told the BBC he admired what he called the company's "heroic" decision to offer an unfiltered service, and hailed the announcement to pull out if it could not reach its objective.

Some people even laid flowers outside the company's Beijing headquarters, in the hi-tech Haidian district, as a mark of respect.

But this sentiment was certainly not shared by everyone.

Another man, an IT worker who would only give his surname, Zhong, said the American firm should respect China's situation regarding this kind of issue.

"China has been using censorship for a long time," he said. "Any change can only happen slowly - it won't happen overnight."

Yahoo sides with Google over China cyber attack

Yahoo sides with Google over China cyber attack
By Hibah Yousuf, staff reporterJanuary 13, 2010: 1:35 PM ET

NEW YORK (CNNMoney.com) -- Yahoo Inc. gave its support to rival Google Inc. Wednesday, denouncing an alleged cyber attack originating in China against Google's network infrastructure.

"We condemn any attempts to infiltrate company networks to obtain user information," a Yahoo representative said in an e-mail statement. "We stand aligned with Google that these kinds of attacks are deeply disturbing and strongly believe that the violation of user privacy is something that we as Internet pioneers must all oppose."

Google said late Tuesday that the attack's primary goal was to access Gmail accounts of Chinese human rights activists. The company said that the incident, as well as Chinese censorship rules, could force it to shut down its operations in China, which includes Google.cn.

The search giant's ongoing investigation suggests the attack targeted at least twenty other large companies from a variety of industries. Neither Yahoo (YHOO, Fortune 500) nor Google (GOOG, Fortune 500) revealed whether Yahoo was among the victims.

"Yahoo does not generally disclose that type of information, but we take security very seriously and we take appropriate action in the event of any kind of breach," Yahoo said.

Microsoft (MSFT, Fortune 500), which launched a Chinese version of its search engine Bing in June, said that the company has "no indication that any of our mail properties have been compromised."
0:00 /3:04Yahoo eyes Chinese expansion

In 2005, Yahoo sold its business in China to Alibaba.com, China's largest e-commerce company. Yahoo maintains a 39% financial stake in the company but Yahoo no longer has "operational control or day-to-day management over the Yahoo! China business," according to a Yahoo spokeswoman.

Google did not have any response to Yahoo's statement.

Google Turns on Gmail Encryption to Protect Wi-Fi Users

Google Turns on Gmail Encryption to Protect Wi-Fi Users

google_logoGoogle is now encrypting all Gmail traffic from its servers to its users in a bid to foil sniffers who sit in cafes, eavesdropping in on traffic passing by, the company announced Wednesday.

The change comes just a day after the company announced it might pull its offices from China after discovering concerted attempts to break into Gmail accounts of human rights activists. The switch to always-on HTTPS adds more security, but does not help prevent the kind of attacks Google announced Tuesday.

All Gmail users will now default to using HTTPS, the secure, encrypted method for communicating with a remote server, for their entire e-mail sessions, not just for log-in. Session-long HTTPS has been an official option for Gmail users since 2008 (and unofficial for much longer), but Google says it hesitated turning it on for all since the encryption does slow down the service.

“Over the last few months, we’ve been researching the security/latency tradeoff and decided that turning https on for everyone was the right thing to do,” Gmail Engineering Director Sam Schillace wrote in the Gmail blog.

This option often wasn’t necessary when people used fixed and trusted connections, such as their home or office DSL or cable lines. But as Wi-Fi connections, especially public ones, became more popular, hackers began using simple sniffing software to snoop on people’s online activities with the goal of stealing passwords.

Still, the switch doesn’t encrypt e-mail — it simply encrypts the communications in transit between Google’s servers and a user’s computer — the same as when you use your bank’s website. E-mails sent to other people are transmitted in the clear as they have always been. True encrypted e-mail can only be read by the sender and receiver, regardless of how they move across the internet.

For those whose schools or workplaces routinely monitor employee or student internet usage, the change also shields their e-mails from the IT department.

A coalition of privacy and security experts called on Google publicly to make the change last June, saying that Google was putting millions of people at risk by not using encryption as the default for their cloud computing services.

Users who find the service slows them down or determine that it’s overkill for their needs can turn the HTTPS off in their account settings.

Rival free e-mail from Yahoo and Microsoft do not use HTTPS throughout their sessions, nor do social networking sites or other so-called cloud-computing services.

Instead, most of those services use the secure HTTPS protocol only for logging in, and fall back to unencrypted browsing thereafter. Failing to use HTTPS full-time increases one’s vulnerability to a host of nasty hack attacks when using an open or badly secured network, particularly a public Wi-Fi spot.