Google Wraps Itself in the Flag
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Matthew Buckley Options University.com |
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Last week Google (GOOG) announced that they are considering pulling out of China as a result of a sophisticated cyber attack against the Gmail accounts of Chinese human rights activists.
The shocking aspect of this story isn’t that it happened. The Chinese have been actively hacking into Pentagon and defense networks for some time, and have been recently prying into the F-35 Joint Strike Fighter program. Add in a couple of spy scandals and one would think the Chinese just don’t like us.
Now, of course, we’re no babe in the woods. Our intelligence agencies are doing the exact same thing. And if they’re not, they’re fired. Again.
The interesting aspect is Google’s response. Is the Death Star turning a new leaf? Are they pausing in their quest for world domination? Depends on if you believe them or not.
The current China operation isn’t that large, and, according to Google, pulling out will not significantly impact their bottom line. Meaning, they can find that amount in their couch. So they may be doing this because it’s the right thing to do. Maybe they saw the tarring Yahoo! (YHOO) received for previously caving to the thugs in Beijing and their penchant to censor free speech. Yahoo! is now trying to get onboard the Google freedom train by supporting their stance…better late than never.
If you don’t believe Google, this could be one way to close a business arm that isn’t working while looking like a hero. The business Jedi mind trick. This isn’t the market you’re looking for.
The one thing we do know is that Baidu (BIDU) stands to profit from a Google retreat, at least temporarily, as we saw after the Google announcement. If anyone thinks Google is going to ditch their long-term plans to own China (along with the rest of the world), I have some Lucent stock to sell you. At a good price.
I have impeccable timing. I put on a February GOOG 550/560 bull put spread the day before the hack announcement, hoping to play the upcoming earnings release. So trying to take that out of the picture, I think this is a positive for Google overall. The Chinese government doesn’t cave to anyone, and neither does Google; so, somehow, some way, this will blow over and Google will be in China. Ummm…it’s the Internet? The Chinese will only be able to stop technology for so long.
Oh and freedom is a pretty hard thing to stop as well. Next stop, Iran.
Even if it is for reasons other than publicly stated, I applaud Google for standing up to a repressive government that limits free speech. Now, if we could only get some more companies to stand up to the other world power taking over businesses and repressing freedoms we might get somewhere. You hear that Burkina Faso?
Matthew "Whiz" Buckley is the Chief Strategy Officer of the Options University, the leading provider of options education for options traders of all levels. He is also the Managing Partner of Check6 LLC, a business-consulting firm specializing in leadership development, risk management, and strategic planning for Fortune 500 companies and related organizations. Whiz flew the F-18 Hornet for the U.S. Navy. He's a graduate of TOPGUN, has close to 400 carrier landings, and flew 44 combat sorties over Iraq. After leaving active duty he rose rapidly though corporate America, starting as Managing Director of Strategy at a Wall Street firm, to CEO of a financial media company. He is an internationally recognized speaker and combined his unprecedented experiences in the military and corporate America in the writing of From Sea Level to C Level.