When it comes to questions of ethics and public relations -- which Internet and information-oriented companies face when doing business in China -- you won't find the answers on Yahoo!
Yahoo! will join tech giants Microsoft
I took issue with Yahoo! last fall, when the company turned over information that helped the Chinese government imprison a dissident; Reporters Without Borders has highlighted a second, similar case. Yahoo! needs to try to maintain the role of a good guy here, noting that there is a problem and at least giving the impression that it's considering better solutions. The company has announced that it will work with industry and government groups to formulate a game plan for doing business in such restrictive societies. These new policies will ostensibly adhere to American culture's treasured freedom of speech
Internet giants like Yahoo!, Microsoft, and Google now face flak for their policies in China, where free speech on the Internet is extremely limited. There are also privacy concerns about U.S. government requests for personal search data here at home, which might make our government's outrage over China's practices seem a bit ironic. (Read about Google's stance on a U.S. government subpoena, as well as a subsequent capitulation on censorship in China, and make your own judgments regarding the company's "Don't be evil" mission statement.)
Ethics aside, the opportunistic element of this controversy also matters to these companies' shareholders. The Chinese market has tons of money-making potential, for Internet concerns in particular; these companies will likely need to crack that market to ensure future growth, which in turn means getting along with China's government.
The coming policies could influence the way users view these companies, their services, and their decisions to reveal or protect search information. Investors should watch carefully for the results of these discussions, and the public's reaction; the ramifications could affect much more than just these companies' share prices.
Alyce Lomax does not own shares of any of the companies mentioned.