Silicon Insider: Microsoft's China Headache

ByCommentary by MICHAEL S. MALONE

June 16, 2005 -- -- There comes a moment in the history of every great company when an unanticipated event cuts through decades and millions of dollars worth of branding, corporate imaging and PR, and exposes that company's core values for what they really are.

We recently saw such an exposure at Apple Computer, when it successfully crushed some Web sites for pre-announcing company products.

Now, this week, it happened to Microsoft. And if, after all of these years, nobody is surprised that the company is willing to compromise ethical principles for profits and market share, the subsequent press coverage suggests that many people are still surprised by how low the company is willing to go.

It's one thing to use your near-monopoly in a market to play hardball with competitors, it's quite another to be a lickspittle to tyranny to enhance your bottom line.

Some background: As reported by The Associated Press, bloggers that use the MSN Spaces section of Microsoft's new Chinese Web portal and type in words like "democracy," "freedom" and "human rights" are immediately hit with a message that says:

"Prohibited language in text, please delete."

You don't know whether to laugh or cry -- at the sheer hamfistedness of the Chinese government (does anybody really believe that a country run this way can become, and remain, a dominant player in the world economy in the 21st century?) or the sheer cynicism of Microsoft for allowing this to happen.

Apparently, Bill Gates, with his laudable AIDS-in-Africa campaign, is willing to spend billions to save peoples' lives -- but won't lift a finger to liberate them.

Thus, the Middle Kingdom meets the Evil Empire … and both find a common interest in suppressing human freedom. It must make Microsoft employees feel all warm and fuzzy going to work each day, knowing that they are part of the Orwellian Thought Police suppressing 1 billion human souls. And how about that paid Microsoft blogger, the one put on company payroll to promote Microsoft and its products -- does he feel any sympathy for those 5 million of his peers on the other side of the world whose words have just been shoved back down their throats? Has he resigned yet in protest?

While we wait for word of employee protests and walkouts in Redmond, at least we have the official responses to comfort us. For example, Microsoft has indeed admitted that it works with its business partner, the government-funded Shanghai Alliance Investment, to omit forbidden words from MSN's Chinese blogs, including not just those offensives terms like "freedom," but also obscenities and sexual terms (there goes half the blogosphere). And, as the story noted, the censorship only seems to cover subject lines, not the actual blog text itself (gee, AP, thanks for letting the authorities know about that little oversight).

In justifying this betrayal of human freedom -- I still get to use that word -- MSN lead product manager Brooke Richardson was quoted by one blogger, John Yunker, as saying, "MSN abides by the laws, regulations and norms of each country in which it operates." If that answer doesn't give you chills, nothing will -- nothing, that is, except the realization that poor Brooke probably doesn't see anything wrong in what she said.

But my favorite MS quote from this story comes from Adam Sohn, a global sales and marketing director for MSN. It was he who confirmed the enlightened partnership of Microsoft with Shanghai Alliance. Then, when asked about the taboo words, he told the AP, apparently with a straight face, "I don't have access to the list at this point so I can't really comment specifically on what's there."

A perfect executive punt. Let me tell you, speaking as an old PR guy, this kind of quality prevarication can't be taught; you've got to be born with it. A more honest executive might have done something stupid, like turning to his computer, typing in the offending words and been quoted saying something like: "Wow, you're right! I can't believe we're doing this!" But not old Adam, he kicked that can way down the road … maybe far enough for the story to blow over … and one can only assume there is a bonus check coming for him in the mail.

It's easy to rip Microsoft for its despicable behavior in this matter. And even Microsoft CEO Steve Ballmer must have gulped when he read the censored words -- could you have picked words more likely to set off civil libertarians everywhere? But, in fact, Microsoft is hardly alone in sucking up to totalitarianism. Google and Yahoo!, to name some other big tech names, have also caved to the Chinese government.

A couple years ago in this column I remembered a legendary, and all-but-suppressed, cover story in the old Computer Decisions magazine from the late '70s, titled "Would You Sell Computers to Hitler?" In it, author and editor Hesh Weiner noted that while few computer companies would ever answer such a question affirmatively, many at that moment were happily selling their wares to murderous dictatorships all around the world. Those companies, including IBM, DEC and HP, justified those sales either by saying that the computers were going to "safe" government departments (as if they could only be used for one purpose) or that such a sale was not barred by the U.S. Department of Commerce (that great arbiter of corporate ethics).

I said at the time that Weiner's story was one of the most important in the history of high-tech journalism. Unfortunately, it has also proven one of the most prescient. The modern corporation doesn't have to fall back on those flimsy and lame excuses of the past. Nowadays, smart companies have a one-size-fits-all excuse for such behavior: cultural relativism. It even enables them to take umbrage at any suggestion that what they've done is wrong: "Who are we to judge if one society (or, in MS' words: its laws, regulations and norms) is better than another?"

In other words, in the name of cultural equivalence, modern American technology companies really would sell computers to Hitler … or Stalin, or, in this case, the direct descendants of old murderous Mao. After all, who are we to judge how another culture feels about a few million Jews, kulaks or hungry peasants?

As the blogger Yunker said brilliantly, "This isn't localization; this is capitulation."

And this is also the dark side of globalization. I've always been a free-market capitalist, but on this I'm amazed to find myself in sympathy with those small-minded WTO street protesters. If anything should constrain capitalism, it should be the preservation and expansion of human freedom.

Meanwhile, for Microsoft et al, if this is the cost of playing in the Chinese market, then why play there at all? Because it is good for business? Not if it corrupts your company. And not if the Chinese people, one day truly free, remember who collaborated in their enslavement.

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

Michael S. Malone, once called “the Boswell of Silicon Valley,” most recently was editor at large of Forbes ASAP magazine. He has covered Silicon Valley and high-tech for more than 20 years, beginning with the San Jose Mercury-News as the nation's first daily high-tech reporter. His articles and editorials have appeared in such publications as The Wall Street Journal, The Economist and Fortune, and for two years he was a columnist for The New York Times. He has hosted two national PBS shows: "Malone," a half-hour interview program that ran for nine years, and in 2001, a 16-part interview series called "Betting It All: The Entrepreneurs." Malone is best known as the author of a dozen books. His latest book, a collection of his best newspaper and magazine writings, is called "The Valley of Heart's Delight."

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