Shi Tao or the difficulty of doing business in China
Observation on the Yahoo! Dilemma, first drafted on Nov. 11, published on Nov. 16, 2007
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Clearly the Yahoo-hearing of the House Foreign Affairs Committee on Tuesday, Nov 6., has revealed a couple of
noteworthy and sometimes even appalling things. Among them are:
Observation on the Yahoo! Dilemma, first drafted on Nov. 11, published on Nov. 16, 2007
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Clearly the Yahoo-hearing of the House Foreign Affairs Committee on Tuesday, Nov 6., has revealed a couple of
noteworthy and sometimes even appalling things. Among them are:
- first, the apparent political naivety and unconsciousness with which Yahoo! has entered the Chinese
market and with which it has been reporting to the House Foreign Affairs committee.
- For how else do you explain its failure to duly inform the Committee about the falsehood of some of the statements that
Yahoo’s General Counsel had given to the Committee earlier on.
- second, the hands-of management style with which Yahoo! head-quarters have followed up internally on
the dealings that its China and Hong Kong subsidiaries had with the Beijing State Security Bureau.
- For how else do you explain the fact that the General Counsel had until the day of the hearing not personally seen the
original request by the Beijing State Security Bureau that had led to the jailing of the Chinese dissident Shi Tao.
- third, the inability of Mr. Jang to clearly inform the Committee about the market and financial pressures that
a listed company faces if it should decide to not enter the Chinese market.
- After all, it is the rise of China that has so far kept the US economy from falling into a recession. And so it is only logical that
an already Google-beleaguered company like Yahoo, cannot easily withdraw from that market without incurring an even
bigger wrath from a selfish financial community. For too little would these investors be willing to understand why Yahoo! i
s not taking advantage of the Asian growth opportunity that it would now still be able to avoid being punished for its
apparent faint-heartedness.
No, no, if we want to be honest here, we have to admit that even the US itself is occasionally compromising its human rights
stance if national interest seems to dictate that. And so it is only natural that a relatively young company like Yahoo! finds it
hard to do that otherwise. For too pervasive do the pressures seem to be that it would now still be easy to resist them.
The fact however that Mr. Jang has been unable to detail this context in front of an albeit adverse and hostile audience
leaves the benevolent observer wondering how he is communicating his positions internally. For too inarticulate has his
defence been in this case, that one could now still trust that he will manage the company otherwise.
- fourth, the inability of the House Foreign Affairs Committee to understand that you cannot do business in
China without cooperating with local police and security forces.
In this respect, it is actually next to ridiculous that members of the Committee really seem to hold the belief that Chinese
officials would care if there were a US law that would prohibit US subsidiaries in China from cooperating with the Chinese
secret police. For too naive is such a view that one could now still hope that its ensuing initiatives will truly have an impact in
this world.
- fifth, the inability of the House Foreign Affairs Committee to be straightforward in the human rights position.
After all, if the Committee is adamant on the idea of protecting democratic dissidents in China it would have to ask
companies like Google and Yahoo to stop doing business in China altogether. And so it should also say to the customers of
these businesses that they will now have to pay higher fees for taking a more moral approach. For too little would they else
have lived up to the consequences of their human rights positions, that they could now still expect others to adhere to them.
Given however that such leadership is not to be had for the time being, it seems somewhat unfair to single out a rather
inexperienced company like Yahoo! for not living up to the highest moral standard. For too little have the masters of its
oversight done the same, that they could now still ask their protégés’ do follow suit.
For investors in Yahoo! this means that they will have to take a more understanding long-term perspective if they really want
to help the company grow reasonably. For too much would a short-sighted selfishness only result in further aberrations that
one could now still hope to adequately profit from the mistakes that other people’s greediness will lead them to commit.
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| Conflict of Interest Statement with respect to Yahoo Q: Does Wil Leonards hold shares in Yahoo? A: No Q: Has Wil Leonards done consulting work for Yahoo? A: No Q: Do members of Wil Leonards' family hold shares in Yahoo? A: No Q: Have members of Wil Leonards' family done consulting work for Yahoo? A: No Q: Are there any other conflicts that Wil Leonards might have with respect to Yahoo? A: Yes, there are. Q: Which are they? A: Wil Leonards is a satisfied and content consumer of Yahoo! products and therefore has a natural interest in that company's well-being. |
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| Addition to this comment from Jan. 5, 2009: Noah denkt™ believes that the Yahoo share price is likely to rise in 2009, given the low level that it is currently trading at. |