Dominoes Circa 2010
March 24, 2010
I was a college student when the “domino theory” was the firewood for many heated conversations. My memory is dim, but I recall that the idea was that if one country fell to a non-democratic, non-market based system, then other adjacent countries would go the same way.
Source: http://community.middlebury.edu/~scs/maps/oilnames.gif
The metaphor is that a line of dominos can be converted into a brief, but somewhat entertaining, event. I never played dominos so I did not relate to the metaphor.
But when I read “Remaining Google Units Exposed: Analysts”, I had a flashback, saw an image of Robert McNamara (Ford executive and strategist par excellence), and a row of dominos set up by a bright 10 year old on the kitchen table. Weird how the mind makes associations that defy time and logic.
The article appeared in The Globe and Mail, which is a pretty good newspaper but not available in hard copy in Louisville. Online reading is hard on my 65 year old eyes but I worked through this article. The most important segment in my opinion was:
Other stakeholders exposed to Google’s actions include cell phone makers like Dell and Lenovo, which are both developing Android-based phones for China, as well as the hundreds of people who independently sell ads and develop software for Google’s products. Spokeswomen at Lenovo and China Mobile, which is planning to offer the Dell Android phones on its network, had no immediate comment. Meantime, other search sites operators stand ready to benefit most form Google’s withdrawal, most notably Baidu – which has 60 per cent of China’s search market – and others such as fast-growing Tencent, analysts said.
What happens if other and unanticipated interactions among Google, China, its partners, its suppliers, and its customers take place?
Source: http://www.insidesocal.com/clippers/dominoeffect.jpg
Several thoughts are percolating through my addled goose brain:
- Google is not a country and China is. This means that China can exercise certain muscles that can squeeze or relax rules, business conditions, or entities. It is definitely good to be a big country with lots of people, police, and money. A single company is at a disadvantage. Might not some Google partners exercise caution in the new arena that Google has delineated.
- Getting money out of a country can be tricky. I remember a senior VP who told me that money earned in Brazil was easily moved to the US. I used to live in Brazil, and he found out that moving money in an “open” country like Brazil was an interesting exercise. China’s ability to make life interesting with regard to money flows may be different from hitting the ATM machine in Palo Alto.
- China can via its holdings in US institutions shake the water bottle for Google back in the good old USA. Assume China owns a share of Google. That shareholder can ask questions about Google’s exercising its fiduciary responsibility to generate revenue for stakeholders. The question might not make much difference to Google, but it creates another type of unintended consequence and I am certain there are others. These range from China’s making lucrative job offers to certain Google engineers to suggesting that living conditions or medical care for a parent might be subject to enhancement or deterioration based on certain individual Chinese citizens’ decisions. That family angle is a fascinating one.
In short, could the analysts be hinting to Google that it should find a way to maximize its revenues in the world’s largest market? Money, not pride, is what makes the MBAs’ hearts go pitter patter in my experience. Dominos anyone?
Stephen E Arnold, March 24, 2010
A short write up for no dough. Terrible situation. Unfair. I will disclose that I wrote this for zippo. Who listens? I know, I know. the Department of Labor really cares. So, done.
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