Kai-Fu Lee Responds to Chinese Media and Web Speculation

One of the biggest pieces of tech news last week was Kai-Fu Lee resigning as the head of Google China. News broke around September 4th (see WSJ article here). Kai-Fu Lee posted a goodbye letter in Chinese on his Sina blog.

The Chinese media & web being the way it is, there has certainly been no shortage of rumors spreading like wild-fire. Proof: Kai-Fu Lee felt obliged to respond to certain rumors, on a new post on his Sina blog (link in Chinese).

Titled “Clarifications on some misunderstandings of the media” (my translation), Lee addresses several specific rumors:

  • His resignation was a fallout from the Chinese government’s severe crackdown on Google China earlier this year (short recap: Google China was labeled as porn friendly by the national television and suffered regulatory punishments). Lee claims that he has met with officials of 3 government ministries in July, where they have acknowledged Google China’s efforts to comply with the Chinese government’s regulations. Lee also posted a (translated) excerpt of a letter from Eric Schmidt, where Schmidt praises the China team for handling the situation well. And Lee further says his resignation was delayed by 2 months as a result of handling this affair.
  • Media speculation around whether he will fully devote himself to his new startup (some media columns seemed to be skeptical of Lee’s stated next venture). To be frank I found it a bit funny for Lee to actually address this – unlike the previous point, which was a natural source of rumors, any discussion around whether someone can be a good entrepreneur or not is just pure gossip. Anyway, Lee says a few things why he’s best fit for his new venture, and also claims that he has been working 20 hours a day for the last week, just to show that he still works very hard (again, a very odd issue to publicly address).
  • Lee also briefly refutes some other speculations, to list a few: tax evasion rumors; Google is considering exiting China; he quit Google because Mountainview doesn’t give him real powers and authority.

My brief two cents:

  • Lee must have been suffering a lot of personal pressure to actually respond to media speculation. This in part has to do with his semi-celebrity status in China, due to both the tremendous career success he has had (as former head of Microsoft Research Asia and Google China) and the very public figure that he maintains (he often talks publicly at universities – I’ve attended one of his “youth mentoring” sessions at my alma mater back in the day).
  • Google China is still at a crossroads. While recent products, especially Google Music (which is a great great product to download music legally btw – the catalog is pretty amazing – though it’s limited to China), has certainly enjoyed some success, Google has only established a beachhead in China. Search market share still trails Baidu by a lot (think Yahoo vs. Google US share). A lot of products still needs refining – Google Ditu (local version of Maps) is subpar in terms of search quality compared to Baidu Map, and the GPS positioning on the iPhone in China is off by about two blocks, to give a few examples. And of course the regulatory environment just makes operating in China a big headache and very risky – as an example, almost all Chinese twitter clones were killed overnight recently (due to tightened control after the Xinjiang riots since July), without any official explanation.
  • As a casual side observation, the fact that Lee hosts a blog on Sina is noteworthy. Sina’s blog platform is noted for “celebrity blogs”, where big real life celebrities host their blogs (one top celebrity, Han Han, has ~20k-50k pageviews and ~3,000 comments for each of his posts). Hosting his blog on Sina is an acknowledgement of how the Chinese web operates (the big 3 portals have immense influence, and Blogspot frequently gets blocked by the GFW). It could also be a sign of friendship since one of Google China’s biggest search deals is to power Sina’s entire website.

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