Moral 'Pygmies'

3:10 PM -- Headlines since yesterday have been all over the lambasting Yahoo Inc. (Nasdaq: YHOO) got from Congress over the jailing of Chinese dissidents. The 24-hour news networks got their sound bite of the week with Rep. Tom Lantos telling Yahoo, "Morally, you are pygmies."

The contrarian in me can't help finding some truth in Yahoo's point of view. To resist demands from the Chinese government is to invite having one's own employees in China sent to jail -- not a much better feeling than helping dissidents get jailed. Once you're playing the game, you're bound by the rules, and that means if a company like Yahoo or Google (Nasdaq: GOOG) wants to serve China, it's going to be complicit in some repression.

One way to avoid that dilemma is to not do business in China in the first place. But in earnings-per-share circles, that's suicide. In fact, shareholders would tell Yahoo -- or any major tech company -- that it's got a moral obligation to maximize returns, and hence, to do business in China. Ironic.

Because I find the latter argument ridiculous, it's easy for me to say that if I ran Yahoo, I wouldn't have done business in China in the first place. But it's not that simple. China can build its own routers and search engines. If they're pressed into doing that, China could become more cloistered, further reducing the chances of democracy there.

That's sort of the argument Cisco Systems Inc. (Nasdaq: CSCO) uses when it declines to more deeply examine its role in aiding nondemocratic governments. (More on that later.) Yahoo, like Cisco, seems to be saying that the best path to democracy is to continue supplying China, and the magic of the Internet will do the rest.

To me, that's either a cynical rationalization for making more money, or just naive. Coincidentally, it might turn out to be correct, but as the Yahoo case shows, that day remains a long way off.

— Craig Matsumoto, West Coast Editor, Light Reading

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Scott Raynovich 12/5/2012 | 2:59:11 PM
re: Moral 'Pygmies' I'd like to see Cisco go with the Smith & Wesson argument: "Hey, do people complain to Smith & Wesson when people get killed? They're just makin' guns, not pulling the trigger."

As for Yahoo, I've read the stuff and I find the whole thing fabulously disigenenous and symbolic of the hypocrisy of Silicon Valley: "Yeah, we are the great democratic liberators of the imformation age! (oh wait you want us to rat out dissidents to keep our juicy Chinese revenue? sure)"

paolo.franzoi 12/5/2012 | 2:59:10 PM
re: Moral 'Pygmies'
Uh - under what banner anywhere is a company committed to helping democracy anywhere? China is a nice visible example here, but all kinds of companies do all kinds of business with non-democratic regimes.

I agree with your comment about the hypocrisy of the message these companies put out, but ANYBODY doing business in China is at some level supporting the regime. Heck, even selling manufacturing toys for the import to the US helps fund the regime through taxes and jobs.

Some more direct than others.

opticalwatcher 12/5/2012 | 2:59:09 PM
re: Moral 'Pygmies' If Yahoo is upfront in China that their 'anonymous' e-mail account information will be handed over to the Chinese government on demand, then it is buyer beware.

Ethics get a little more questionable when American companies give information stored on a server that is in the US to Chinese officials, and even censor poste information on request of these officials, as one company much larger than Yahoo has done. What if the Chinese start asking for the home addresses of Chinese dissidents living in the US?

You have to ask yourself if there is some line they can cross that would be too far even for you.
rjmcmahon 12/5/2012 | 2:59:09 PM
re: Moral 'Pygmies' Yahoo hands out everybody's data to the department of homeland security too. It's not unique to China.
freetoair 12/5/2012 | 2:59:09 PM
re: Moral 'Pygmies' ahh...Google hands it out to Home Security as well...
DarkWriting 12/5/2012 | 2:59:08 PM
re: Moral 'Pygmies' These "Yahoos" are the same amoral (that's "a" not "i") group that calls downloading bootleg music "not stealing" as seen on the other thread. Descendants of the sandals, t-shirts, no bath, greasy hair bunch, classic computer nerds going back as far as the '70s..

As the joke goes:

We already know what you are, we're just haggling over the price!

rjmcmahon 12/5/2012 | 2:59:06 PM
re: Moral 'Pygmies' ahh...Google hands it out to Home Security as well...

Right. So maybe Congress knows what Moral Pygmies are all too well? The executive branch screams, "National Security!" and Congress starts handing over our liberities. Yahoo execs should have brought a mirror to the hearings.
chophopper 12/5/2012 | 2:59:05 PM
re: Moral 'Pygmies' Last I checked the US military wasn't running over the citizenry with tanks.

> Exactly, the hypocrisy of Congress is stunning. America is only *slightly* better than China when it comes to human rights and free speech.
tsat 12/5/2012 | 2:59:05 PM
re: Moral 'Pygmies'
Exactly, the hypocrisy of Congress is stunning. America is only *slightly* better than China when it comes to human rights and free speech.

High-Tide 12/5/2012 | 2:59:03 PM
re: Moral 'Pygmies' Well said - This hits a nerve with me. Maybe it's enough to make the stragglers get off their duffs and actually vote for once in their lives. At least I hope it is!

Sometimes, it is shameful what is done in the name of the people. Admittedly, it's a rough world out there, and sometimes nasty things need to be done to "Save the Federation". I think it is clear that sometimes we go way too far.

I believe we (collectively) get what we deserve. If half the people who voted for American Idol also bothered to vote for their elected leaders, who knows what the political landscape might look like: We might even have leaders we respect - and they might actually represent our values!

Now back to industry related fare....

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