Google Warns Of China Exit Over Hacking

[camerata]

Google Warns of China Exit Over Hacking

Cyber Attack Targeted as Many as 34 Firms, Email of Human-Rights Activists; Investigators Probe Link to Chinese Government

Google Inc. said it may leave China after an investigation found the company had been hit with major cyber attacks it believes originated from the country -- a move that would amount to one of the highest-profile rebukes yet of China by a major U.S. firm.

The attack targeted as many as 34 different companies or other entities, according to two people familiar with the investigation, which has been under way for weeks.

Investigators are probing whether the attack is linked to the Chinese government or intelligence services, one person familiar with the investigation said. The attack has piqued the interest of U.S. intelligence agencies, including the National Security Agency, this person added.

Full Story.

[Phil Conners]

Why don't they simply disconnect China. It's the worlds biggest concentration of crapware (servers allowing anything from spam, drive-by-virus, malware, counterfeit stuff, etc). They obviously don't want to be part of the rest of the world and play by common rules so it would probably make life a lot easier for many people in the rest of the world without them. They could make their own network between Korea, Brazil and Romania, then they could have fun hacking and destroying each others networks.

[Crushdepth]

Why don't they simply disconnect China. It's the worlds biggest concentration of crapware

Going back about 8 years, most of the random pounding on my webserver used to be from US machines. Then that died away and for 2 or 3 years it was Russian machines. Then they took a back seat and the majority of it now comes from Chinese machines.

A couple of weeks ago the Chinese Government indicated that its thinking about whitelisting the entire internet. They are thinking about blocking *everything*, and then allowing access to sites on a case by case basis - and only for sites that are officially registered/approved by the government. Given their government's appallingly antisocial online behavior might as well go the whole hog and disconnect them. But their government would probably like it.

Kudos to Google for telling them to jam it. You'd have to think the true extent of the problem must be horrendous for Google to take this step.

Edited January 13, 2010 by Crushdepth

[thunder30101]

Yeah right google is going to give up the biggest internet market in the world over principals lol Google is just another corporate whore these days. They knew exactly what they were jumping into when they got in bed with the chinese, all they saw was the potential for profits. Now that the chinese have googles technology and dont need them anymore google wants to whine lol. Just ask Yahoo what happens when you sell yourself to the chinese.

[Crushdepth]

Like I said, the Chinese government must be doing something really, really horrendous for Google to take this step. I have no difficulty in believing it at all since they seem to be the masters of online bastardy at the moment. But quite likely it is also just the first step in a negotiation.

Edit: And its a much better policy than that of the corporate rats at Yahoo, who have publicly said they don't exist to reform the Chinese government (ie. they'll kiss butt and hand over personal data to stay in business, which they have already done, resulting in imprisonment of dissidents).

Edited January 13, 2010 by Crushdepth

[neverdie]

Sounds like google is blowing a heap of hot air up someones backside........won't happen.

[Crushdepth]

Let China live with Yahoo then...heh heh heh

[Crushdepth]

From the Official Google Blog - the full article is well worth a read:

These attacks and the surveillance they have uncovered--combined with the attempts over the past year to further limit free speech on the web--have led us to conclude that we should review the feasibility of our business operations in China. We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China.

[neverdie]

Sounds like google is blowing a heap of hot air up someones backside........won't happen.

Doh!

[pampal]

Google is second to Baidu in China. They haven't been able to beat the Chinese search engine and all of a sudden they realized they have morals. Yeah Right

[Crushdepth]

From Scobleizer.com:

"...how do you think Baidu got so big, anyway? You think they are actually more innovative? Yeah, right. "

Interestingly, his blog says he works for a company called Rackspace. I found a reference to a now-deleted paragraph from the Wall Street Journal article that says the attackers hijacked a computer at a company called...Rackspace...which was used to store the stolen Google data temporarily before sucking it off overseas.

Coincidence ?

Edited January 14, 2010 by Crushdepth

[nikster]

Google is second to Baidu in China. They haven't been able to beat the Chinese search engine and all of a sudden they realized they have morals. Yeah Right

I think all your sarcasm is misplaced. Google had the option to engage or pull out, previously they have gone the engagement route, now they are doing what they should have done all along, which is to refuse to censor their own search results. Their previous argument was that having some search results is better than being banned altogether, now they've reversed course. 30% market share is nothing to sneeze at in China - this is a huge amount of business and opportunity that Google is putting on the stake.

Of course this being Google and not the Human Rights Watch, they are combining ethics with business - their credibility could implode overnight if hacking Gmail becomes commonplace. Their credibility was already damaged by the decision to censor their results in China.

Now a lot of you might have not though of that or might disagree, but I think that Google has two assets only - technical excellence, the search is pretty good. And trust. People trust Google. In that light, censoring was always wrong, and giving into Chinese demands in any way was always wrong. Trust is hard to earn and easily lost, once people lose trust in Google, they'll remove their Gmail accounts, and use other search engines. This goes a long way towards restoring trust in the integrity of Google.

I kinda like the pissed off attitude towards the Chinese government trying to break into accounts - what other company has balls to stand up to China? Whole countries come crawling in hopes of Chinese money piles (think of any European country, or even the USA). The high and mighty defenders of human rights and democracy turn into whimpering beggars in face of Chinese cash and power. It's pathetic. Google standing up is a big deal, even though Google is probably one of only a handful of companies world-wide that can afford to do this. Microsoft would be another one but who wants to bet that's ever going to happen? No... way....

Edited January 15, 2010 by nikster

[Crushdepth]

Steve Balmer said Microsoft "doesn't understand" Google's reaction because it "happens all the time" and Microsoft won't consider leaving China. I wouldn't really expect them to, but could at least make a few dissaproving noises since they are trying to develop all these cloud-based services as well. If they don't care that their users privacy is illegally violated, they aren't going to do very well in that market.

I think Google did the right thing. Business and governments have been seriously piling into Google Apps. You can imagine the stampede out if Google had been seen to tolerate intrusions by the Chinese government (or anyone else).

Yahoo are backing Google's position, but they were also one of the companies assaulted.

Edited January 15, 2010 by Crushdepth

[george]

But Ballmer didn't say Internet Explorer vulnerabilities was a part the attack:

http://mashable.com/2010/01/14/google-china-attack-anatomy/

[nikster]

I think Google did the right thing. Business and governments have been seriously piling into Google Apps. You can imagine the stampede out if Google had been seen to tolerate intrusions by the Chinese government (or anyone else).

Exactly!

[nikster]

But Ballmer didn't say Internet Explorer vulnerabilities was a part the attack:

http://mashable.com/2010/01/14/google-china-attack-anatomy/

Of course an IE exploit would be used first and foremost - easiest to do. However, you can't blame Microsoft for a targeted attack like this. An attack that is made by a sophisticated entity (presumably China secret services, or hackers paid for it) and, more importantly, targeted on very few people inside an organization, or even a single individual, is near impossible to prevent.

Depending on the resources you want to put towards that, you could relatively easily create an exploit for any browser or any OS out there. Then if you do a bit of research you can social-engineer a message that would likely fool anyone. AV programs won't spot the attack because the custom malware used is unknown to the AV programs.

Only sandboxing might help, once and when it's working. But even for that, social engineering (e.g. human error) can get around it.

[OriginalPoster]

Google is second to Baidu in China. They haven't been able to beat the Chinese search engine and all of a sudden they realized they have morals. Yeah Right

I think all your sarcasm is misplaced. Google had the option to engage or pull out, previously they have gone the engagement route, now they are doing what they should have done all along, which is to refuse to censor their own search results. Their previous argument was that having some search results is better than being banned altogether, now they've reversed course. 30% market share is nothing to sneeze at in China - this is a huge amount of business and opportunity that Google is putting on the stake.

Of course this being Google and not the Human Rights Watch, they are combining ethics with business - their credibility could implode overnight if hacking Gmail becomes commonplace. Their credibility was already damaged by the decision to censor their results in China.

Now a lot of you might have not though of that or might disagree, but I think that Google has two assets only - technical excellence, the search is pretty good. And trust. People trust Google. In that light, censoring was always wrong, and giving into Chinese demands in any way was always wrong. Trust is hard to earn and easily lost, once people lose trust in Google, they'll remove their Gmail accounts, and use other search engines. This goes a long way towards restoring trust in the integrity of Google.

I kinda like the pissed off attitude towards the Chinese government trying to break into accounts - what other company has balls to stand up to China? Whole countries come crawling in hopes of Chinese money piles (think of any European country, or even the USA). The high and mighty defenders of human rights and democracy turn into whimpering beggars in face of Chinese cash and power. It's pathetic. Google standing up is a big deal, even though Google is probably one of only a handful of companies world-wide that can afford to do this. Microsoft would be another one but who wants to bet that's ever going to happen? No... way....

Agreed, but less discussed than China's abuses is that many western countries try to hold intermediaries responsible for contents that pass though their pipeline. For instance, Italy is trying to press criminal charges against Google executives for failure to remove an offensive video from youtube in a timely manner: http://www.nytimes.com/2009/11/26/technolo...es/26video.html. That particular video sounds as if it must have been particularly outrageous, but it seem that western distaste for censorship is rather selective and that the penalties for failure to censor are sometimes quite severe.

Edited January 15, 2010 by OriginalPoster

[pampal]

Google is second to Baidu in China. They haven't been able to beat the Chinese search engine and all of a sudden they realized they have morals. Yeah Right

I think all your sarcasm is misplaced. Google had the option to engage or pull out, previously they have gone the engagement route, now they are doing what they should have done all along, which is to refuse to censor their own search results. Their previous argument was that having some search results is better than being banned altogether, now they've reversed course. 30% market share is nothing to sneeze at in China - this is a huge amount of business and opportunity that Google is putting on the stake.

Of course this being Google and not the Human Rights Watch, they are combining ethics with business - their credibility could implode overnight if hacking Gmail becomes commonplace. Their credibility was already damaged by the decision to censor their results in China.

Now a lot of you might have not though of that or might disagree, but I think that Google has two assets only - technical excellence, the search is pretty good. And trust. People trust Google. In that light, censoring was always wrong, and giving into Chinese demands in any way was always wrong. Trust is hard to earn and easily lost, once people lose trust in Google, they'll remove their Gmail accounts, and use other search engines. This goes a long way towards restoring trust in the integrity of Google.

I kinda like the pissed off attitude towards the Chinese government trying to break into accounts - what other company has balls to stand up to China? Whole countries come crawling in hopes of Chinese money piles (think of any European country, or even the USA). The high and mighty defenders of human rights and democracy turn into whimpering beggars in face of Chinese cash and power. It's pathetic. Google standing up is a big deal, even though Google is probably one of only a handful of companies world-wide that can afford to do this. Microsoft would be another one but who wants to bet that's ever going to happen? No... way....

Agreed, but less discussed than China's abuses is that many western countries try to hold intermediaries responsible for contents that pass though their pipeline. For instance, Italy is trying to press criminal charges against Google executives for failure to remove an offensive video from youtube in a timely manner: http://www.nytimes.com/2009/11/26/technolo...es/26video.html. That particular video sounds as if it must have been particularly outrageous, but it seem that western distaste for censorship is rather selective and that the penalties for failure to censor are sometimes quite severe.

What I wrote wasn't sarcasm (except the ending) , it's the truth. Google is not used to being second best.

Being the second best search engine hurts Google's credibility immensely.

It actually seems more like a face saving way of bowing out of China.

Edit: Typo

Edited January 15, 2010 by pampal

[cdnvic]

China doesn't seem too worried about it. If anything, I think they tolerate Google, Yahoo, and such for political reasons.

http://www.cnet.com/8301-19709_1-10435194-10.html

[LaoPo]

But Ballmer didn't say Internet Explorer vulnerabilities was a part the attack:

http://mashable.com/2010/01/14/google-china-attack-anatomy/

Is this article saying that Google's security measures are exclusively depending on Microsoft's IE ?

"...........we haven’t talked a lot about exactly how Chinese hackers actually broke through Google’s security measures."

That would be astounding wouldn't it ?

LaoPo

[LaoPo]

China doesn't seem too worried about it. If anything, I think they tolerate Google, Yahoo, and such for political reasons.

http://www.cnet.com/8301-19709_1-10435194-10.html

The day-to-day Chinese doesn't even use Google very much; they use Baidu (controlled, yes) which is far larger as a search machine in comparison the Google.

Google, according to Forbes*, has a 31% market share versus Baidu's with 64% but I have my doubts about those numbers.

* http://www.forbes.com/2010/01/15/baidu-chi...omepagechannels

Personally, I think the Google/China move will be temporarily, as everything in life, and China especially, is temporarily.

The Chinese and Google aren't as dumb as they shout out now in the press but as a foreign company, even as important as Google (I couldn't do without them) you can't threaten Beijing.

You will lose, although temporarily and the Chinese and Google will find a way to create consensus, in the end. They can't do without each other.

It's almost like a déjà vu since we've seen the same, although a few years earlier, with Microsoft.

And, then, finally President Hu Jintao of the PRC went to the USA and had dinner/banquet at Bill and Melinda Gates' villa in April 2006....BEFORE he met the US President...

President Hu knew how important Microsoft was and still is in China and couldn't do without them but the game has to be played and Mr. gates understood better rather than the young chaps at Google do at this very period in history.

It's all in the game and it takes time but in the end it will work out.

LaoPo

[nikster]

Most companies would kill for a 30% market share in China. Do you really think Google would go "boo-hoo we're not the market leader so let's just quit". That's silly. 30% if the Chinese market is more people than 100% in most other countries.

I don't think Google will compromise this time. As was pointed out above, there is too much at stake. They will not filter their search results in China, and China will block them as a result. Same as google.com which as Google has pointed out was always accessible to Chinese finding a way around the firewall, and was always uncensored.

[pampal]

What is silly is to assume that the heads of Google woke up one morning and had a "Jerry Maguire" moment. Suddenly deciding that what they had done in the past was wrong and now they want to change the status quo. Google was stagnating in China, and their Gross China revenues were only 1% of their global turnover. Furthermore, they couldn't be seen as not being the leading search engine in one of the biggest internet markets in the world. So they made a decision(or PR stunt) to stand up to Beijing gov't.

Let's see how long it lasts.

[LaoPo]

Most companies would kill for a 30% market share in China. Do you really think Google would go "boo-hoo we're not the market leader so let's just quit". That's silly. 30% if the Chinese market is more people than 100% in most other countries.

I don't think Google will compromise this time. As was pointed out above, there is too much at stake. They will not filter their search results in China, and China will block them as a result. Same as google.com which as Google has pointed out was always accessible to Chinese finding a way around the firewall, and was always uncensored.

I am not so sure as you are, knowing the Chinese a little....

"

Indeed, why give up now--unless you realize there's no way you're ever going to win the race. After all, Page and Brin had already crossed the line back in 2006 by agreeing to have their new Google.cn, run from China, subject to censorship. They didn't have much choice. All companies doing business in China follow the same Chinese government rules. Yes, Baidu's search results are also censored.

It wasn't all that long ago--2004--that it looked like Google might use Baidu as its entry route. Google invested $5 million in Baidu for a 2.6% stake but shifted strategy in mid-2006 by selling those shares for more than $60 million and rolling out Google.cn the same year. In hindsight, and given its bumpy history in China and this latest jockeying with the Chinese government, maybe Google should have pursued the go-with-Baidu strategy.

If Google exits the $300 million Chinese search market now, it's giving Baidu runway to be a monopoly. And if that happens, Baidu has a shot at becoming the world's dominant search company (it's already entered Japan) by sheer arithmetic alone.

By serving China's nearly 300 million Internet users and 670 million mobile phone users--both the world's largest markets--Baidu may someday be bigger than Google globally, something Robin Li once told me he has no doubts will happen."***

To leave China completely would be about the dumbest Google could ever do, with (if we have to believe the numbers) a Chinese market share of 31%.

But, as I said before, Google isn't that dumb and so aren't the people in Beijing but the problem here is that Baidu is far larger than Google in China and in numbers of users in Asia (the 300 million Internet users in China is still growing very fast) and the part in "Italic" showed that Google made a huge mistake by selling it's stake in Baidu in the middle of 2006 (for a lot of -short term- profit; give them credit but it's peanuts on the long term) and thinking they could do it alone.

They were wrong.

*** From: http://www.forbes.com/2010/01/15/baidu-chi...omepagechannels

Personally, I think the Google soup with spicy threats isn't so hot.

LaoPo

Edited January 16, 2010 by LaoPo

[LaoPo]

But Ballmer didn't say Internet Explorer vulnerabilities was a part the attack:

http://mashable.com/2010/01/14/google-china-attack-anatomy/

Is this article saying that Google's security measures are exclusively depending on Microsoft's IE ?

"...........we haven’t talked a lot about exactly how Chinese hackers actually broke through Google’s security measures."

That would be astounding wouldn't it ?

LaoPo

Well, George, it seems my question is answered already, here:

"The warning from the (German; LP) Federal Office for Information Security comes after Microsoft admitted IE was the weak link in recent attacks on Google's systems."

From: http://www.thaivisa.com/forum/German-Gover...ml#entry3272618

LaoPo

[ding]

China, good riddance to bad rubbish!

[LaoPo]

China, good riddance to bad rubbish!

You mean that Google was bad rubbish in China or that the bad rubbish was already bad before they started themselves after they got rid of Baidu's bad rubbish in 2006 or are both bad rubbish and that the bad rubbish will be left alone for Baidu to continue with bad rubbish and grow into the largest search machine in the world over time ?

I hope not because I like Google

LaoPo

[thunder30101]

Baidu will never get large outside of china or a few other asian markets that dont mind censorship, the chinese love it because of the their nationalistic pride which they can never see through, they choose it because they are told it is theirs, made by them, Ask any of my chinese students about baidu, start questioning them where the technology came from and watch them get mad and swear its chinese. Google knows it isnt going anywhere with market share in china due to this and the usual chinese way of stealing and copying technology with gov approval.

[LaoPo]

Personally, I think the Google soup with spicy threats isn't so hot.

LaoPo

And...guess what ?

Google Denies Media Reports on Closure of China Site, Office

By Wing-Gar Cheng

Jan. 16 (Bloomberg) -- Google Inc., operator of the world’s most-popular Internet search engine, denied media reports that it has decided to shut Google.cn site and close its China office.

Hong Kong’s Chinese-language newspaper Sing Tao Daily reported Google has made the decision to close its China office, citing a mainland Chinese Web site sponsored by a government ministry.

Google earlier this week said it would no longer censor search results on its Web site in China and is considering shutting down Google.cn and closing its offices there. The company came to the decision after a “highly sophisticated” attack on its computer system and evidence that human-rights activists were targeted.

Today, Google is operating its business as usual in China and is still censoring search results on Google.cn, a spokeswoman, who declined to be identified, said. Its employees in China are still going to work, she said.

Continues: http://www.bloomberg.com/apps/news?pid=206...d=ax3R._M1rgys#

LaoPo

[LaoPo]

Baidu will never get large outside of china or a few other asian markets that dont mind censorship, the chinese love it because of the their nationalistic pride which they can never see through, they choose it because they are told it is theirs, made by them, Ask any of my chinese students about baidu, start questioning them where the technology came from and watch them get mad and swear its chinese. Google knows it isnt going anywhere with market share in china due to this and the usual chinese way of stealing and copying technology with gov approval.

You could make a big "valuation" error here.

In capitalization (both companies are listed on the NASDAQ), Baidu is a baby in comparison with Google.

However, the growth possibilities in Asia where the largest growth is to be expected in the next decades is in Baidu's favor and Google knows it and will therefore not throw the towel in the ring in China, IMO.

In the past year the stock price of Baidu rose 300% whilst Google (not bad either) went up 100% but of course that's tainted as they first went down but Baidu surpassed it's all time high in Nov 2007 already when it reached $ 407 and is now at a new all time high of $ 467.

Google had an all time high of $ 714 in the same month of Nov 2007 but is now at $ 580.

But, the share prices don't say too much, it's the growth in the Asian hemisphere.

Asia has 60% of the world's population with almost 4 Billion people and THAT hemisphere is where Baidu is strongest.

Next to that, we shouldn't forget that Baidu will buy other companies in the near future and will thus grow fast. It's just a matter of time, the same as western companies are buying others; Asian companies will -and ARE doing- do the same. We live in a global economy now not an American or Chinese economy anymore.

It's all in the game of business.

IF someone would ask me where to put $ 100K I would definitely buy Baidu shares rather than Google but I would wait for a worldwide bear downer of 10-15% first; it's around the corner.

"Baidu will never get large outside of china or a few other asian markets...."

I wouldn't bet on that; you might loose.

LaoPo