Sergey Brin is a perfect example of a young entrepreneur: young, good looking, and fabulously rich. Of course, the fact that he and California buddy Larry Page are head honchos of the world's most watched Internet company, Google, helps quite a bit as well.
So it must have taken Brin a lot of courage when he admitted that Google had accommodated "a set of rules that we weren't comfortable with" at a meeting with reporters near Capitol Hill in Washington, DC. Brin was talking about his company's compromising with Chinese authorities in blocking Internet access and searches for sensitive keywords on their Chinese website google.cn. He further said "Perhaps now the principled approach makes more sense."
But sticking to one's principles requires being willing to face the consequences of one's choices.
The Rise of Google
Founded in September 1998 by Sergey Brin and Larry Page, Google was a culmination of research by the then PhD students at Stanford University into building a "hypertextual web search engine." Since its beginning as a simple, clean, ad-free and—most importantly—efficient and fast search engine, Google has gone on to become the second most popular website in the world. In terms of popularity, it now ranks only behind Yahoo! It left other competitors like Altavista and Lycos in the dust.
Google became the most innovative company in the Internet world. It was one of the first to launch image and video searches, maps and GMail that used a seminal technology called Ajax to give users an interactive experience in the browser, and several other innovations that Yahoo! and MSN are still struggling to catch up with.
"Don't Be Evil"
Perhaps Google's biggest appeal and its claim to coolness came from the fact that Google was an underdog that was taking on the giants: a small, nimble David facing up to cash-rich Internet behemoths like Yahoo! and Microsoft. In this way, Google was different from the cult of Apple Computer: it was not only "cool" but also extremely popular.
Part of this popularity was the sense that Google was a different kind of company. At a July 2001 meeting it chose the motto "Don't Be Evil." Google claimed to make its corporate culture rely on trust and conduct that would enhance long-term brand image.
With all these factors in place, it was perhaps no surprise that Google filed for a $2.7 billion initial public offering in late April of 2004. Over the last two years, it has seen its stock price quadruple from its initial offering of around $100 to $391 at the time of writing.
The China Debacle
However, in late January 2006, Google took a step that would become the most disliked decision in its corporate history. It announced that it would censor its search services in China with a Chinese language Google at www.google.cn
Google.cn complied perfectly with what the mandarins in Beijing's Communist leadership wanted. It blocked all information from the free world that spoke out against the atrocities of the Communist regime and its human rights issues.
There was a moderate backlash to Google's announcement: several bloggers pulled the plush Google AdWords advertising service from their website in protest of Google's acceptance of censorship in China. A few announced that they would stop using Google's search service and use other search engines instead.
Just a few days after the censored google.cn was announced, Google's cosy honeymoon with the stock market ran into heavy weather as its stock price crashed in the first week of February 2006. Lower than expected profit margins led to investors shaving off 19% of its stock price in two days: amounting to a loss of $24 billion in market share value.
The Chinese have an old saying: " Shan you, shan bao. E you, e bao. " Literally translated: "good is met with good, evil with evil." Perhaps an indication to Google that it should pay some more attention to age-old Chinese truths—and its own motto—about evil?
The Choice
When Brin admitted that Google may have compromised its principles, he provided a glimpse into the thoughts and feelings of the powerful young man at the helm of Google. Despite Google's overwhelming dominance among search engines, Brin was still looking at the business from a moral perspective.
Brin's short speech revealed that Google still had a human side: a side that perhaps had not succumbed to the attitude that business has no morals, the side that had made Google popular and loved. It revealed that perhaps Brin had not let the China gold rush go to his head to the point that he and Google were to neglect human rights issues and the welfare of the Chinese people.
The next day, the Chinese Communist regime reacted in an expected fashion: it issued a bellicose threat that Western companies had to comply with its dictates if they wanted to do business in China. Further, the regime began blocking the international Google website that day.
Brin and Google quickly backed down from the statement they had made the day before, stating that the company was still committed to doing business in China.
Brin faces a clear choice: sticking with Google's principles or accommodating demands by the Chinese Communist regime that he knows are evil in the hopes of making money in China.
The record of Western companies making money in China is not particularly strong, and the dreams of gold in China have often turned to fool's gold. Given the Chinese regime's past record, the odds are that within a few years a home grown search engine owned by high-ranking members of the Communist Party will handle most of the business in China that Brin expects Google to have a fair chance to win.
Perhaps Sergey Brin simply needs to understand how thoroughly evil is the Chinese regime, and then the choice facing him and Google will be obvious. In any case, let's hope he makes the right choice.
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