Imagethief

Tag: Reputation

  • China’s food crisis PR strategy: Blame everyone else

    A few weeks into China’s rippling food quality crisis a PR strategy is coming into view. It’s a classic one: blame everyone else. Unfortunately, it’s not likely to be all that effective because of two things. First, China does actually have long-standing problems with food and drug quality. Second, China’s poor history of transparency makes it hard for them to dispel suspicion (a problem that also dogs their disease-related communication).

    The recent affair began with the discovery that vegetable protein shipped from China to the USA and used in pet food had been contaminated with melamine, a plastic that can make the overall protein level appear higher. Melamine also destroys the kidneys of cats, as it happens, so the contamination was discovered.

    In classic fashion, China’s initial response was to deny everything. As a crisis PR strategy this sucked. Nothing makes you look sillier and less credible than retracting a categorical denial made in haste. It taints every following communication. In fact it wasn’t entirely China’s fault. Initially AQSIQ, China’s quality monitor, wasn’t looking for melamine, but another suspected contaminant. But obscure mitigating technical factors don’t tend to play well in the court of public opinion, or excuse prudence. In the face of further disclosure, the Chinese government’s subsequent choices were to appear dissembling or incompetent.

    Every country has its fair share of food quality problems. In my native USA E. coli bacterial contaminations are something of a national sport, and I can remember plenty of food poisoning scandals. Eric Schlosser’s book, Fast Food Nation, makes fine reading if you are interested in the topic. The FDA conveniently puts its “refusal reports” –the reports of imports rejected– online. If you want to be horrified, read the Mexican list. Food contamination is not an exclusively Chinese problem.

    China’s government has grabbed onto this idea as part of its defense. It has been helped by some recent developments, including the rejection of a shipment of Evian for alleged bacterial taint (a case that stokes the fire of another China PR issue, Danone’s legal war with Wahaha — see this interesting post from China Law Blog) and the discovery of Melamine in some US-manufactured animal feed ingredients. Li Yuanping, director general of the government’s Import and Export Food Safety Bureau, also pointed out that China has in the past rejected US products due to Salmonella contamination, and asserted that China’s record on food exports is slightly better than the United States. Li offered up some winning quotes:

    “Ninety-nine percent is a relatively high percentage of suitable goods,” Li Yuanping, director general of the government’s Import and Export Food Safety Bureau, said at a news conference. “Facts speak more loudly than anything. . . . From what I have told you, you can see China has a very sound system that can guarantee the safety of food exported abroad.”

    ***

    “No food-inspection system is foolproof,” he said. “It’s like an airplane. Flying is said to be the safest way to travel, but sometimes you have plane crashes.”

    Bad choice of words in Imagethief’s opinion. You think an airline would communicate that way? But I haven’t been hired to advise the Chinese government.

    Graceless rhetoric aside, Li might actually be right. But perception is everything. Frank Luntz, a conservative pollster, wrote a pretty good book about public communication called Words that Work in which he relentlessly drove home a key point: It isn’t what you say, it’s what people hear (in fact, that’s the subtitle). You say “99% are good”. Americans in bathed in relentless media coverage will hear, “1% might kill you”. Roll the dice and move your mice.

    Like a premature categorical denial, “everyone else sucks too” is considered a weak strategy around our office. You think China’s national ambition is to suck only as hard as everyone else? I think they want to be better. More importantly, as far as the audience is concerned we’re not talking about everyone else. We’re talking about export-driven China, which has a great deal at stake in overseas perceptions of its food quality. In international trade, food and drug safety issues get entangled with every other hot button issue. And in the US right now China is second possibly only to Iraq as the hottest of hot-button countries.

    To illustrate, let’s look at that Mexican example above. America simply doesn’t have as big an axe to grind about Mexican imports (except for immigrants) as it does about Chinese ones. Mexico isn’t the emerging strategic rival. Mexico doesn’t hold a trillion dollars worth of American debt. You don’t hear about America’s trade deficit with Mexico (about a quarter the size of the one with China in 2006). By and large, Mexico doesn’t threaten American agriculture so much as it props it up with cheap labor.

    You get the idea.

    Agenda hockey

    Following the great melamine scandal of ’07 a few other China-linked disasters have emerged into public view. In early May the New York Times ran a lengthy investigative report on tainted cough syrup in Panama killing people. The cause was toxic, cheap ethylene glycol from China sold as harmless but more expensive glycerine and used in the manufacturing. The ethylene glycol has been getting around, apparently, as it has also found its way into Chinese toothpaste (proxy link) exported to Panama, the Dominican Republic, Costa Rica (and, for good measure, smuggled into Nicaragua) and, it has been discovered, the United States.

    As far back as mid-May, Dave Barboza of the New York Times and International Herald Tribune was writing about China’s “credibility problem” surrounding food exports. The situation has not improved since then. Barboza points out that a thirty-billion dollar a year export business it at risk. And that’s where the agendas come into play. The Washington Post, among others, has run op-ed columns editorializing about Chinese food imports in pretty strong terms. Here’s a recent lede:

    And what is madame’s dining preference this evening? Scallops coated with putrefying bacteria? Or mushrooms laced with illegal pesticides?

    These delicacies and more were among the hundred-plus foods from China that our Food and Drug Administration detained at U.S. ports last month, Rick Weiss reported in Sunday’s Post. Detained and sent back to the importers, who ofttimes sent them back to us again.

    Yuck. The Rick Weiss story linked to in that op-ed piece is headlined “Tainted Chinese imports common”. That’ll stick in people’s heads.

    China is busy trying to persuade the United States to allow imports of Chinese frozen chicken, among other things. What stories do you think American chicken farming companies are busy reminding Congress of right now? The Boston Globe, which is not much of a China cheerleader (they regularly run op-ed pieces on China and Darfur and have played a big role in the “Genocide Olympics” campaign), was running gross-out stories on Chinese chicken farming way back in early May, before this whole episode even kicked into high gear. More recently, the American press has been reminding everyone that their vitamins all come from China. That story was by McClatchy’s Tim Johnson, who also wrote an interesting post about this on his blog. Check it out to see some interesting public reaction.

    So the picture that is emerging is of a food and drug supervision apparatus that is hopelessly broken and that has been for some time. This will be no surprise to anyone who lives in China, where food scandals fall from the skies like the Shanghai plum rains. But it’s making waves overseas now, with enormous business implications. You might think that a serious, soul-searching look at the state of domestic regulation and enforcement, vigorously communicated, would be China’s solution.

    You would be wrong.

    The blame game

    China certainly takes the situation seriously. In fact, seriously enough that English-language state media in China, in the form of the China Daily, excoriated China’s regulators for their crappy communication (here reported on by the AP). That is significant. In fact, suggesting something of an editorial slant, the China Daily also went so far as to publish a Wall Street Journal story titled “China confronts crisis over food safety” in its entirety on the China Daily website, with attribution and an external link.

    The popular Southern Metropolis Daily also ran a column by journalist and blogger Lian Yue, translated by Danwei, that linked the food safety problem to broader problems in China. I don’t know if similar commentaries ran elsewhere in Chinese language media. Anyone who has seen anything should post a comment.

    But the official response from the government, represented largely by AQSIQ, has been essentially to blame anyone and anything but the system.

    In the case of the Panamanian cough syrup, the deputy head of AQSIQ blamed Panamanian traders, an account disputed elsewhere. In the case of the tainted toothpaste, China is accusing the American FDA of sensationalizing the situation. In that same story the head of AQSIQ’s food safety division accused the foreign media of the same thing, describing their reporting on the scandals, in an exquisite choice of words, as “wanton”.

    The charge of media sensationalism may be justified to a degree, but blaming the media is almost never an effective PR strategy. It carries an inescapable whiff of Scooby-Doo, as in, “I would have got away with too, if wasn’t those meddling kid reporters!”

    Finally, the Chinese government is blaming its former drug chief, Zheng Xiaoyu, for the entire situation (interestingly, a Google search for his name this morning causes Nanny to issue the deadly “server reset” message). The unlinkable South China Morning Post drove the point home with a headline last Friday that read, “Corrupt drug chief blamed for scandals.” AQSIQ and the State Food and Drug Administration (SFDA) double-teamed on this one:

    SFDA spokeswoman Yan Jiangying said the agency should not be blamed for Zheng’s mistakes. “I want to highlight that we should not dismiss the entire drug supervisions system because of a single person, Zheng Xiaoyu, and we should not extend the mistakes made by a single person, Zheng Xiaoyu, to the mistakes of the entire system,” she said.

    So its Zheng Xiaoyu’s fault if you had any trouble reading between the lines. And people say the Chinese are cryptic.

    When China rolls somebody’s head over a scandal it’s not always a metaphor. To show how serious it is about that accusation, Beijing has sentenced the hapless Zheng to death. It has been a long fall for the man who was tasked with cleaning up in the wake of the awful Anhui baby formula scandal of 2004.

    Killing the wrong chicken

    Let’s go back to Frank Luntz’ point about it not being what you say but what people hear. Executions have a proud tradition as public communication. China thinks that the message that they are sending  with Zheng’s sentence is, “We are goddamn serious about this.” Imagethief is willing to bet that the signal received by overseas audiences will be, “We are so thoroughly corrupt that we had to execute our former top drug regulator.” The question going through heads overseas will be, “Well, whom haven’t they caught yet?”

    Executing a mandarin probably won’t have any effect at all on the small processors and exporters who seem to be responsible for most of the problems. Zheng is too far removed from them. Unless small companies feel the weight of enforcement landing squarely on their own shoulders, with an attendant shift in the overall risk/reward equation, their behavior won’t change.

    The lingering question is whether a combination of endemic corruption and industry fragmentation render the problem unsolvable. An Imagethief commenter named Jim recently made a good point. He wrote:

    Processing millions of tons of food, through millions of workers in tens of thousands of large and small companies, with high cost-cutting motivations, from millions of farms through thousands of transportation companies to millions of sellers to tens of millions of buyers, is hard.

    Yes, it is. But I’m an optimist and China needs to show that it is serious about regulating that very process and enforcing vigorously if they want to get past this episode. And they need to clearly communicate exactly what they are doing to both domestic and overseas audiences. Good crisis PR isn’t about bluffing your way past a real problem, it’s about explaining what you are doing to solve it. No one will expect China’s food problems to be fixed quickly, but people can be pretty forgiving in the face of some contrition and obvious effort.

    The other option is to keep pointing fingers elsewhere. That might save face and keep people at home happy, but it won’t influence overseas audiences who will keep hearing in the most visceral terms possible how broken China’s regulatory system is. Doors will slam on Chinese imports. Overseas manufacturers conscious of their own brands will look elsewhere for ingredients. And the Chinese government will look foolish and self destructive when the next scandal boils out of the bowels of a broken system.

  • Did the “Genocide Olympics” influence China?

    Propaganda and censorship are two sides of the same coin. Both share the same goal: to enable an individual or organization to shape consensus in a group. They often work together. Censorship eliminates competing ideas, creating a void in which propaganda can be more effective. Having a coup? Seize the transmitters and studios so you control the message. It’s a time-honored strategy. Propaganda and censorship are related in another way. They both work cumulatively, over time. It’s not usually the “magic bullet” that drives consensus so much as the patient steering of discourse over time via many channels.

    But propaganda and censorship do have one difference. I wrote recently that the most powerful censorship is what you don’t see. That’s not always the case with propaganda. Brilliant propaganda can certainly be subtle. Think of manufactured word-of-mouth campaigns that cultivate something that feels like a grass-roots public groundswell. But brilliant propaganda can also be right in your face. There was nothing subtle about the 1934 Nazi Party rallies, but they were brilliant propaganda, as was Leni Reifenstahl’s film of the rallies, Triumph of the Will. That was propaganda as sensory overload and religious experience. And it was devastating in cultivating the Nazi mythology.

    The 1936 Olympiad was also propaganda, designed to showcase the grandeur of the Third Reich and the physical superiority of Hitler’s Aryan race. Like the 1934 rallies it was also filmed by Leni Reifenstahl. There was a problem with the Olympiad, however. It was hijacked by Jesse Owens, the black American sprinter who won four gold medals and undermined the messages that Hitler wanted to send to the world. Owens was a powerful, visual symbol and he himself became the lynchpin of a public mythology.

    Now it’s China’s turn. China is not Nazi Germany, but the 2008 Olympic Games is as symbolically important to China as the 1936 Games was to Hitler, if not more so. It is a monumental affair staggering under symbolic baggage, and it will be, once again, propaganda as a religious experience. Like the 1936 Olympiad, however, it is also vulnerable to being hijacked. Jesse Owens didn’t mean to undermine Hitler’s message. He just wanted to win. But that didn’t change his impact.

    China won’t have it so lucky. The Olympics is more than a sporting competition. It’s a global platform that makes a seductive lever for anyone with an agenda that they want to propel into the public consciousness. The modern Olympics has always been seen as an opportunity to make political statements. Hence Owens in 1936, Tommie Smith’s and John Carlos’ “black power” salute in Mexico City in 1968, the Black September hostage drama in 1972 in Munich (Germany star-crossed again), and the reciprocating Russian and American boycotts of 1980 and 1984. China’s Olympic games isn’t even the first time an authoritarian Asian nation has used the Olympics to debut on the global stage. That honor goes to Korea, for the Seoul games in 1988, when Korea was at the tail end of its authoritarian regime. You can even make a case that Japan beat Korea to the punch in 1964 when its summer games served as the stage for Japan’s symbolic postwar rehabilitation less than twenty years after the end of WWII.

    If all of this makes you feel a little grimy, remember that the modern Olympics exists specifically as a propaganda vehicle (and here I include marketing as a kind of propaganda). The IOC may call it a “movement”, evoking images of grass roots participation and noble sporting ideals, but that is propaganda itself, designed to draw a graceful fig leaf over the reality that the Olympics is a vast business venture –reportedly US$4 billion in revenue over its previous quadrennial cycle– driven by sponsorships and advertising. Sponsors take the messaging opportunity seriously, as well they should considering what they invest.

    China, hungry to be seen anew as a great power, had its own agenda in mind with the Olympics. Unfortunately for China, all the debate and controversy that swirls around its human rights, environmental and geopolitical issues is being dragged along in the Olympic slipstream. People have China axes to grind, and that beautiful Olympic fulcrum is too enticing to pass up. The 2008 Olympics was politicized from the moment it was awarded to Beijing, and will be more contentious than any games in modern memory. That’s a big deal considering the Olympics’ propaganda-splattered pedigree. In the PR industry we refer to the 2008 Olympics as “issues rich”, which is a polite way of saying, “watch this space for crisis”.

    That’s why “the genocide Olympics” is such a brilliant piece of propaganda. It is as un-subtle as you can get, and it looks like being effective.

    The phrase has emerged into the popular consciousness thanks to a campaign by actress and activist Mia Farrow and her son Ronan, most recently in an op-ed piece (also here) published in the Wall Street Journal and Boston Globe (and possibly elsewhere) in late March. Mia Farrow is just one of a constellation of people and groups with a China issue. In fact, Ms. Farrow’s real problem is with the Sudanese government’s sponsorship of widespread destruction and killing in the Darfur region. But China’s support for the Sudanese government and its investment in Sudan make it a convenient pressure point, and the Olympics provide that all-important leverage. The editorial says:

    [There] is now one thing that China may hold more dear than their unfettered access to Sudanese oil: their successful staging of the 2008 Summer Olympics. That desire may provide a lone point of leverage with a country that has otherwise been impervious to all criticism.

    Whether that opportunity goes unexploited lies in the hands of the high-profile supporters of these Olympic Games. Corporate sponsors like Johnson & Johnson, Coca-Cola, General Electric and McDonalds, and key collaborators like Mr. Spielberg, should be put on notice. For there is another slogan afoot, one that is fast becoming viral amongst advocacy groups; rather than “One World, One Dream,” people are beginning to speak of the coming “Genocide Olympics.”

    Does Mr. Spielberg really want to go down in history as the Leni Riefenstahl of the Beijing Games? Do the various television sponsors around the world want to share in that shame? Because they will. Unless, of course, all of them add their singularly well-positioned voices to the growing calls for Chinese action to end the slaughter in Darfur.

    The Farrows don’t take immediate credit for “the genocide Olympics”, and in fact the phrase has been circulating since at least last December, when the Washington Post ran an editorial by that title. The Boston Globe, extends a degree of credit to a Smith University professor named Eric Reeves who advocated the Olympic-China-Darfur link on their own op-ed page, three days after the Post piece ran. A week after Reeve’s piece, theGlobe ran another editorial that cited Reeves and did use the phrase “genocide Olympics”. (The Globe has been banging the drum very hard, and it launched the phrase again in a new editorial from May 8th, here republished in the International Herald Tribune.) The phrase also had a bout of publicity in March thanks to the Farrows, and has been resurrected in the past week or so thanks to the efforts of US politicians, including long-time China critic Tom Lantos and others:

    “We don’t want these Olympics to go down in the history books as the genocide Olympics,” said Lantos, chairman of the House of Representatives committee on foreign affairs.

    ***

    “It is outrageous that China is using the very symbol of international unity and brotherhood to further grind down the Tibetans and the Taiwanese who simply want to live their lives without interference from Beijing,” Lantos said.

    Two things are making this a successful campaign.

    First, the campaigners have a brilliant slogan. The genocide Olympics. It sticks in the head and it conjures up the worst possible set of associations. It fits on a T-shirt (which you can order), and it is evocative and emotive at a visceral level.

    Second, in a classic PR strategy, the advocates have marshaled what we in the biz call “a chorus of voices”. One angry person heaving around an incendiary phrase does not necessarily make for PR disaster. An expanding group of celebrities, politicians, activists and editorial writers heaving that phrase around does. Over time they will imprint “the genocide Olympics” on the public consciousness. (Mr. Reeves writes more about the campaign here.)

    The Farrows did something else brilliant. They appropriated an intensely powerful advocate in Steven Spielberg, who is advising the Beijing Olympic Committee, and they did it in the most audacious fashion possible. The Farrows compared the Jewish film director and Shoah (Holocaust) Foundation founder to Hitler’s own cinematic propagandist, Leni Riefenstahl. The drew a direct and highly visual line from 2008 to 1936, right through Mr. Spielberg’s chest, and turbocharged the genocide concept. Mr. Spielberg obliged by apparently personally lobbying China to take tougher action on Sudan.

    So is it all working?

    This is debatable. China is notoriously impervious to outside pressure. But China doesn’t necessarily need to be directly persuaded. If the “genocide Olympics” idea gains enough currency, major sponsors and other national governments will start to become queasy. If the activists can pressure Visa, McDonalds, Coca Cola, GE, Samsung et. al. (Lenovo is probably a write-off) then they’ll pressure Beijing and the IOC in turn. And the sponsors, who depend upon the image of the Olympics, control the money that is the life-blood of the “movement”.

    Despite its tradition of hard-headedness, China last week appointed a special envoy dedicated to the Darfur crisis. Earlier, shortly after the Farrows and Mr. Spielberg ratcheted up the pressure, China dispatched a “senior official”, Mr. Zhai Jun, to Sudan to push the Sudanese government to accept a UN peacekeeping force in Darfur. On April 12, the New York Times reported on Zhai in an article titled “Darfur collides with Olympics and China yields”. (Behind the Times paywall but can be read on Ms. Farrow’s website.) The article suggested a direct link between the campaign and the mission. Lest you think China is getting soft, however, Mr. Zhai is quoted in the article describing boycott advocates as, “either ignorant or ill natured”.

    Perhaps the link isn’t as direct as it seems. Last week I had coffee with an experienced China journalist who said he felt the article was reaching in linking the campaign directly to Zhai’s visit, and that China had already been in motion on Darfur. Indeed, the article itself says:

    During closed-door diplomatic meetings, Chinese officials have said they do not want any of their Darfur overtures linked to the Olympics, American and European officials said.

    In an e-mail message on Thursday, a spokesman for the Chinese Embassy in Washington warned anew against such a linkage. “If someone wants to pin Olympic Games and Darfur issue together to raise his/her fame, he/she is playing a futile trick,” the spokesman, Chu Maoming, wrote.

    But the Chinese would say that. After all, if they admit having been pressured once, the floodgates will open. Darfur is only one of the agendas swirling around the Olympics, and other interested parties will be watching to see to what extent the Olympics can be used to pressure Beijing.

    In another discussion I had last week, the regional managing director for one of my company’s cross-town rivals wondered aloud to me if China is ready for a “multi-stakeholder world”. That’s a PR flack’s way of wondering if the Chinese can gracefully juggle the pressures that will accumulate from governments, activists, Olympic sponsors, celebrities and everyone else who has one of those China axes to grind. Not every pressure campaign will have the in-your-face impact of “the genocide Olympics”, but more are certainly on the way. I think the success or failure of the Olympics will be determined not by the campaigns themselves, but by the grace and sensitivity with which China can respond to them. Angry rhetoric aside, if there is any sincerity to them them then China’s recent moves with regard to Sudan are promising.

    Unfortunately, it will be hard for China to shed its authoritarian and reactionary instincts. Just this week the country responded to a recent Tibet-oriented protest on the slopes of Mount Everest by cracking down on individual tourism to Tibet. That self-destructive move will generate exactly the kind of negative publicity that will remind the world of all of China’s faults, and ensure that the shadows continue to linger over 2008.

  • Foxconn shoots themselves, Apple in foot

    Note: This post consolidates three original posts on this topic that were published on consecutive days. It was also cross-posted on my CNET blog, published in 2006 and 2007.

    Part One: Foxconn shoots themselves, Apple in foot

    You may recall Foxconn, AKA Honhai Precision Manufacturing, as the company at the center of a recent PR crisis for Apple Computer, when a British newspaper published reports that they were mistreating the workforce responsible for assembling luscious (and expensive) iPods. In the last few days Apple, ever image conscious, got round to publishing their own report on the situation, and it has largely faded from the public consciousness.

    But Apple isn’t the only company that was left scrambling to protect its reputation in the wake of the scandal. Foxconn too felt hard-done by, and is taking steps to assert itself. Unfortunately, rather than take constructive steps to reassure the international companies who’s own brands are propped on Foxconn’s labor practices, Foxconn has instead decided to make an example of two Chinese journalists. This looks like a move that has the potential for mighty backlash.

    China’s English Language Shanghai Daily broke the story in the mainstream. Here it is reprinted by Xinhua:

    BEIJING, Aug. 29 (Xinhua) – A Chinese court has frozen the personal assets of a reporter and an editor at a Shanghai newspaper after Apple iPod manufacturer Foxconn sued the pair for 30 million yuan (US$3.77 million) for allegedly damaging its reputation over reports of substandard work conditions.

    Foxconn’s subsidiary in Shenzhen reportedly petitioned the city’s Intermediate People’s Court on July 10 to freeze the property of Wang You, a reporter for China Business News, and Weng Bao, an editor at the newspaper. The locked-up assets include apartments, a car and bank accounts.

    The company also filed a lawsuit against the journalists, seeking 20 million yuan from Wang and 10 million yuan from Weng. The case is the biggest of its kind on the Chinese mainland in terms of the size of the compensation claim.

    I am not the only one who sees Foxconn’s response as being perhaps a bit disproportionate. Sentiment seems to be gathering that the lawsuit is a blatant press intimidation tactic rather than a dispassionate seeking of legal redress. Two excellent English language China blogs have taken Foxconn to task. Non Violent Resistance writes, in a post scathingly titled “FoxConn is not dumb, but downright vicious“:

    Words in the Chinese press circles are, that FoxConn, therefore Hon Hai, had deliberately picked the two journalists from China Business News to sue in a painstaking plot to harrass and intimidate media outlets and journalists. After all, China Business News was not the only newspaper that doggedly followed the iPod sweatshop story. It seems that FoxConn, before launching the much criticized lawsuit, had also considered targeting 21st Century Economic Herald, another popular business newspaper who had similarly covered the story. But FoxConn’s lawyers, after much investigation, found out that the 21st Century reporters who were involved in reporting the story had solid, formal employment contracts with the paper — therefore, unlikely to be held as legitimate defendants in a court.

    Roland Soong, of EastSouthWestNorth, writes:

    If I can make this case very simple.  This is not a question of whether the First Financial Reporter was right or wrong in his reports.  Either way, FoxConn is entitled to file a civil libel suit against the newspaper, which employs that reporter and his editor.  But since when does a civil libel suit involve freezing the assets of the reporter and the editor, including their bank savings accounts, stock holdings, homes and automobiles, to the tune of 10 million RMB for the editor and 20 million RMB for the reproter?  As the reporter noted, this amount is many more times than that which he can ever expect to make in his lifetime.  By comparison, how would the western media react if a prominent American newscaster such as Katie Couric were sued by a large corporation and have all her personal assets frozen for the duration of the legal proceedings?  The Chinese media workers are of the opinion that if this case were allowed to go through, it will be the end of any coverage of the doings of large corporations.

    More good information from Roland here.

    I can see the thought forming in your head. Dude, it’s China. Press intimidation? So what else is new? But it isn’t quite that simple. Yes, the press in China doesn’t operate with the same freedom that is does in the west, especially when it comes to political reporting. But what the government can get away with in the name of social harmony and what a Taiwanese corporation –even a connected one– can get away with are not the same.

    So what might the PR implications be? Well, the story is now being picked up by various foreign media, including specialized voices such as China CSR, and wire services like AFX,AFP (here on the International Herald Tribune) and Reuters, whose headline suggests that, despite what Non Violent Resistance fears, the newspaper will vigorously defend its journalists. Reuters has actually bothered to get out and do some reportage, and their story includes a quote from one of the sued journalists and a quote lifted from a party-managed Chinese newspaper’s editorial, and written apparently without irony:

    “(The case) has sent a dangerous signal to society, and means legal procedures could be used to suppress freedom of speech,” said an editorial in the official China Youth Daily.

    How about that. If China Youth Daily is complaining that you’re infringing freedom of speech, you have a problem. But journalists –even at official news organizations– will look after their own. Superb China media blog Danwei thinks the story has all the right ingredients to keep titillating western editors (and I agree). The China blogosphere is also gathering heat. Yesterday mega-portal Sina, smelling a juicy story, set up a blog for the two journalists, and the posts are attracting lots of comments and lots of readers. The momentum may not last, but its got off to a good start. The net result is that Foxconn is committing one of the great PR sins by busily making itself look worse than the people it is angry at ever did. And there is no damage worse than self-inflicted damage, which suggests stupidity.
    So if you’re Apple what do you think of this? Remember, this incident is descended from an Apple-related story, and MacWorld UK has also picked up the lawsuit story, so it’s creeping close to Apple’s own brand. The whole thing has now gone beyond simple libel lawsuit and in just 48 hours has spiraled into something nasty with a real whiff of media intimidation about it. Reputation damaging questions are also being asked about Foxconn’s relationship with the Shenzhen government and courts. Chinese press isrubbishing the case. Well, if I’m Apple (or their PR guy), the last thing I need is for the contract manufacturer who just gave me a mighty PR headache to give me another mighty PR headache just ten days after I’ve put the last one to bed (Apple’s report was released August 17). Despite their own recent, poorly thought out lawsuits, media intimidation is not something that resonates well with Apple’s cerebral, trendy brand. If I was Apple I’d be gently suggesting that Foxconn back off if they want to keep my business.

    But, hey, that’s just me, and I’m a nice guy who likes reporters, even though I do bug them with pitch calls from time to time.

    Part two: What was Foxconn thinking?

    Originally published August 30, 2006.

    Every now and then, Roland [Soong, of EastSouthNorthWest] dangles a PR question in front of me and, like a shark rising predictably to the bait, I pretty much always go for it. In yesterday’s post [above] about Foxconn’s fit of PR self destruction, Roland asked in a comment:

    What is the matter with FoxConn? Why is this “no comment” thing? Keeping their fingers crossed and hoping that it will all go away? Can you guess what is going on?

    Well, I am happy to guess. But I’d like to remind all readers that this is nothing more than speculation, innuendo and hypothesis. Of course, that’s never stopped me before.

    From a PR point of view, there are a few things going on here: the original foreign and Chinese newspaper reports about Foxconn’s labor practices, the subsequent lawsuit filed against two Chinese journalists, and the current (entirely predictable) coverage explosion over the lawsuit and refusal of Foxconn to comment. This would be a complex situation for any company to manage from a PR point of view. But it’s going to be even harder for Foxconn. I am going to make a sweeping generalization here: Chinese companies (including Taiwanese ones – please keep your “one China” screeds to yourself) by and large don’t “get” PR. As an old China hand friend of mine said, “They don’t understand PR. They understand face.” Well, just like face can get you into a fistfight that never needed to happen, it can also get you into a PR disaster that never needed to happen. But I think the Foxconn situation runs deeper than simple face.

    Putting the problems of Chinese companies with PR somewhat more scientifically, many of them are just learning what PR is and how to use it. As a Taiwanese company and contract manufacturer, Foxconn evolved in a somewhat more developed media market than mainland companies. It has also been around for more than thirty years, although its internationalization in earnest started in 1993. But as a contract manufacturer –and not, say, a consumer brand– Foxconn may also think that it is insulated from certain kinds of PR problems. This may have been true once, but today, when the bloom is off the outsourcing and contract manufacturing rose, and MNCs are under increasing scrutiny for the behavior of their partners, this is not the case. That lesson should have been made painfully apparent in the original Apple scandal of a couple months ago.

    But there is another complexity operating here: this isn’t just a PR crisis (yes, its an official crisis now). It’s a legal PR crisis. And legal situations are always particularly difficult. With all due respect to my good friends at China Law Blog (who may wish to comment upon some of the legal aspects of this case), lawyers and PR people often rub along poorly. A sound legal approach and a sound PR approach to a given situation do not always agree. I am perhaps nursing a bit of resentment here. Put a CEO, a head of PR and a general counsel in a lifeboat together and maroon them at sea until they begin to starve and see who gets eaten first. Nine times out of ten the CEO and general counsel will eat the PR guy. The CEO’s calculation may be that he’ll need a lawyer to keep him out of jail for cannibalism. Personally, I think that’s misguided. After all, who’s going to do a better job of explaining cannibalism to the public and protecting his reputation?

    My personal issues aside, the upshot is that legal decisions are often considered to trump PR decisions, and are thus taken without regard for the PR consequences. This is especially true in companies with an unsophisticated approach to PR, but it can happen to anyone. In China we see this with things like IPR lawsuits by MNCs against local companies, which make perfect legal sense but can sometimes have PR consequences far more damaging than the actual infringement. But somehow legal problems are considered “real” while PR is considered, well, just PR. So it’s possible that even if someone within Foxconn explained to the management that suing journalists directly was a stupendously bad idea PR-wise, it’s possible that they were simply dismissed as a touchy-feely PR type without the spine to face up to hard-boiled business issues.

    To which that PR person, if he exists, should be saying who’s laughing now, dumbass? Of course, now this poor flack is busy trying to deal with the PR crisis upon which he will probably be judged, so he has no time to gloat. It’s a hard life in the spin doctors.

    So that brings us to the “‘no comment’ thing” mentioned by Roland. Regardless of whether PR people were consulted prior to the lawsuit or not, it’s pretty standard practice for companies to refuse to comment on pending or ongoing litigation. Doing so can often create further legal problems, anger judges, etc. Unfortunately, this can also evolve into a sort of programmed, knee jerk response that is automatically given even in situations where companies really ought to comment. Personally, I think this is a situation that increasingly merits comment. Furthermore, my advice to clients is that you always return a journalist’s phone call, even if it’s just to tell them that you can’t comment, and even if you expect to get roasted for that. It’s a basic courtesy and “could not comment” or even “refused to comment” generally looks better in print than “could not be reached for comment” or “did not return phone calls”, both of which make it sound like you’re hiding and amplify the appearance of guilt. Next to the image of you cowering in a smoke-filled crisis room while unanswered phones ring away, the blandest of holding statements can seem like pure gold. In this case, Foxconn is apparently not returning any calls, so, true or not, they look like they’re hiding. It also makes it hard to know if they’re playing the “don’t comment on litigation” card or if they’re just being obtuse. I’m betting on obtuse.

    Ultimately the question of motivation looms here. Is Foxconn motivated by a sincere desire to address a slight to its reputation by seeking legal redress? Or is it seeking to intimidate the Chinese press as a way of buying future insurance against bad coverage? If it is taking the first course it has committed some serious PR mistakes. It is almost always a bad idea for corporations (or governments) to sue individuals who were working on behalf of an organization, such as a newspaper. For examples, see Apple’s lawsuits against leakers and the RIAA lawsuits against file sharers, both of which were PR disasters even if they were legally sound. Suing an organization looks like seeking redress. Suing an individual looks like petty vindictiveness. David v. Goliath. It’s not that difficult an equation. (Mind you, I am speaking strictly from a PR point of view, not a legal one.) Foxconn has sued the journalists rather than their newspaper. Not only that, it has sued them for far more money than either of them is ever likely to possess, and has had their assets frozen. This not only looks petty and vindictive, it also looks sleazy since they have somehow managed to engineer a presumption of guilt and, without the benefit of a judgment, inflict considerable misery on…a journalist and an editor. And we all know how much Chinese journalists are paid. So if Foxconn was seeking to address a slight to its reputation, it has failed monumentally and is now doing even more damage to its reputation.

    On the other hand, if Foxconn was seeking to intimidate journalists…it has also failed monumentally since the Chinese (and International press and, um, bloggers) are now going crazy.  Nice work guys. It’s Miller time.

    In addition to the China PR problem, Foxconn is also entering into extremely risky territory with regards to its foreign customers, like Apple. Anyone who has followed the recent problems of US Internet and technology companies in China knows that freedom of speech issues are weeping dynamite for foreign companies doing business in China. The last thing a company like Apple needs is a contract manufacturer being accused of media intimidation in China. Imagine:

    “Hey Apple! Your contract manufacturer was just accused of horsewhipping underage girls for sixteen hours a day and now they’re trying to intimidate Chinese journalists into silence on the issue. What’s your comment? How do you feel about the freedom of Chinese media to report on these kinds of issues?”

    Despite my advice above, I’m thinking Apple doesn’t return that phone call. Or if they do, they give a non-answer about how this is an issue for the Chinese courts to settle, Apple has taken great pains to blah blah blah noise noise noise. Apple, you will recall, has had its own problems with the media, and may not want to attract charges of hypocrisy. They will also, somewhat justifiably, want to get All The Facts first.

    But that’s tough for them, because this is their PR problem too and, as I wrote yesterday, if I’m Apple I’m on the phone to Foxconn right now telling them to drop the suit, save face by announcing that their point has been made and suck it up. Better yet, Apple should set a further example for MNCs using contract manufacturing in China and come out with a statement vigorously defending the right of the Chinese press to look into the practices of MNCs and contract manufacturers in China. Apple sells jack here and has essentially no market to lose in China, and can always shift its manufacturing to Vietnam or wherever, so why not retake some of the high ground it lost over the original scandal? What’s Foxconn going to do? They’re Apple’s vendor, and there are plenty of business-hungry contract manufacturers in line behind it.

    And this situation has begun to touch Apple. RSF is already on the case, with an open letter to Steve Jobs.

    But what if the journalists actually did libel Foxconn?

    Interesting question. But from a PR point of view (not a legal one, mind you) now irrelevant. The public opinion and reputational battles have already been lost. A legal victory would be Pyrrhic at best. Foxconn absolutely has a right to defend its reputation in the courts and to respond vigorously when libeled. But legal action in defense of reputation must be considered, planned and executed with an eye on further reputational consequences (this is where PR people and lawyers often diverge). And that is something that Foxconn did not do. Furthermore, Chinese journalists will, if anything, probably be motivated to scrutinize Foxconn even more closely from now on.

    So if I were Foxconn’s PR person what would I now advise them? Presumably after I got done berating them for not talking to me before they launched the lawsuit?

    Drop the lawsuit. It’s too late to salvage this one. Drop it, make a face saving announcement and let it go. And if you must pursue the lawsuit, admit that you were “overzealous”, have the court unfreeze the journalists assets and allow them to go on with their lives pending a judgment. And reduce the damages sought to something symbolic. Remember, this is PR advice, not legal advice. I have no idea how possible any of this would be in Chinese courts. But, at first glance, Foxconn’s relationship with the Shenzhen courts looks pretty cozy, so it shouldn’t be too hard.

    And, really, stop making life difficult for your customers. You don’t need a PR man to tell you that’s a crappy way to do business.

    Notes:

    • iSuppli analyst Adam Pick recently wrote a story hailing Foxconn’s success. Among the factors he noted, “making the most of the China advantage”. It scarcely needs be remarked that one can take “the China advantage” a bit too far if not careful.
    • I should note, by way of full disclosure, that I am not a litigation support expert. That’s a specialized PR field, like financial communications, best practiced by people with a good understanding of the legal environment in which they operate. So my observations are those of a PR generalist. Litigation support experts are welcome to comment.

    Updates:

    • Danwei with some more interesting background and opinions from Chinese media.
    • Sina’s tech news page (not the journalist blog) devoted to the situation, including a handy timeline graphic (Chinese).
    • One of my bosses, a very experienced Chinese PR professional, thinks that Foxconn will be forced to withdraw the litigation. He even thinks it is possible their chairman may have to apologise. We’ll see.
    • Roland’s excellent follow up on the PR war between Foxconn and the journalists includes translations of some of Weng Bao’s blogs (the sued editor). Roland also makes an excellent point that I should have, and which is key to how Foxconn needs to think about this PR battle. From a public communication point of view this PR war is assymetrical. Foxconn is an enormous, faceless corporation speaking in corporatese. The journalists are identifiable human beings able to muster emotion and personal sympathy and use press freedom (in an acceptable local context) as a rallying cry. That means that even if they are guilty, they have the upper hand in the PR battle. Foxconn needs to consider that in all of the their PR strategizing if they are to have hope of looking like anything other than relentless bullies. (Hint: get some real people front and center.) As I wrote above, whether or not libel was committed is now essentially irrelevant. Foxconn can win but still lose if they are not careful.
    • I hear that CCTV 2′s “Dialogue” program is planning a special segment on the affair.

    Part Three: All’s well that ends in retreat

    Originally published on August 31, 2006.

    According to ESWN Foxconn has reduced the damages requested to 1 yuan. Roland is citing a very brief Netease report, and I am not sure how authoritative it is. But if it is true, then it means that Foxconn has taken one of the possible paths I outlined yesterday: reduce the damages to a symbolic level but proceed with the lawsuit. Apple also interceded in the dispute, as I suggested they should. I’d like to claim credit for remote PR genius but, a) it’s not genius, it’s common sense; b) Foxconn and Apple are probably not reading this blog and c) we’ll see how things play out for Foxconn in the Chinese press over the next few days.

    Just as interesting as the Foxconn scandal itself is a sideline discussion that has broken out over the newsworthiness of the story with regard to western audiences. Roland was originally disappointed with slow uptake of the story by Western media. Do read his post above, which offers his point of view on this and lists many of the foreign news sources that eventually did carry the story. Then be sure (especially if you’re a China PR pro) to read this post from Richard Spencer, bureau chief of UK newspaper the Telegraph. Richard keeps one of the best journalist blogs in China and he explains very clearly what news value this story has and doesn’t have with regard to his (middle-England) readers. I should send this post to my clients when they ask why I don’t pitch their China business stories to general-interest Western media like the Telegraph, as opposed to specialist business media such as The Wall Street Journal, Financial Times and Business Week.

    I’m a technology PR man so I think in terms of brand and reputation with regards to technology companies. I wrote the story for my CNET Asia blog, but then I have a specific China technology mandate, no editing to speak of, and write for an Asian readership specifically interested in technology. More generally, I tend to judge a story this way: “If I was that company’s PR man, would I be worried?” For me this story had potential legs overseas for one reason: Apple. Apple is a hot brand that just navigated a China PR scandal involving Foxconn. With an Apple press story as the origination of the of the lawsuit this is potentially interesting to foreign audiences and thus a PR risk for them. If was Apple’s PR man, I would have been worried.

    I see that a lot of the overseas coverage was fairly narrow. Some of it is in journalist blogs (as in Barron’s and the San Francisco Chronicle) and much of it in specialist technology news (Slashdot, VNUNet, MacWorld) interested specifically in the Apple connection. I put “Apple” in my own CNET headline. Most of what might considered mainstream coverage with a broad impact is either from the wire services –which covered the story widely– or business media (The Wall Street Journal, Financial Times), many of which ran the wire coverage. That’s understandable; Foxconn is a large, listed company and a major supplier to many enormous, Western technology firms, so there are business implications.

    So it was a story outside of China, but a particular kind of story. It’s interesting what crosses borders and why. When I do internal training in foreign media relations for my company I spend some time on what different kinds of foreign media consider an interesting “China story”. It always raises some eyebrows among my local colleagues.

    A closing thought. I love my summer PR scandals. Last year: the Songhua River. This year Foxconn. Gotta love those crazy August days.

    Disclosure: I am not Apple’s PR man.

    Update: Xinhua has run a story on Foxconn’s claim reduction:

    Foxconn said it lowered the compensation claim so that the public could focus on the fact that “the untrue reports had damaged the reputation of our company,” and not just on the 30 million yuan compensation claim, Sina reported, citing company spokesman Edmund Ding.

    Damn straight. And the newspaper reports aren’t the only thing damaging Foxconn’s reputation now, and it’s a little late to refocus the public’s attention. Next they think they have been libeled, they can sue the newspaper. Then, if they win, the newspaper can discipline the reporters and it won’t be their problem. Hard lessons learned. Note that I have no opinion on whether the journalists did libel Foxconn or not. That’s something for an (ahem) impartial  court to work out.

  • What if Yahoo abandoned China?

    If you grew up in the US reading Marvel Comics, like Imagethief, you may remember the old What If? series. In What If? the fates of Marvel superheroes were projected into alternate realities. It made for some pretty good stories as the conventions attached to characters you knew and loved were overturned. I had one issue where Conan the Barbarian was stranded in the 20th century, became leader of a street gang, kicked Captain America’s ass and was ultimately invited to join the Avengers. The classic What if the Hulk had Bruce Banner’s brain? made it into the Best of Marvel Comics anthology. It’s fun to play those kind of conjecture games, knowing that at the end of the day you’ll snap back to reality (or your regular monthly subscription) and everything will be just how you left it.

    I thought it might be fun to play this game with Yahoo, which has paid the worst price in terms of PR and brand damage for its association with China. Yahoo has been repeatedly vilified for its conduct in China, taking it on the chin from New York Times columnistNicholas Kristof (via Peking Duck), power-blogger and Global Voices supremo Rebecca MacKinnon in one of her angriest posts ever, and others. Much of Yahoo’s trouble has stemmed from their implication not only in filtering and censoring their China results, but also in turning over information from e-mail accounts belong to Chinese journalists to the Chinese authorities.

    Like all the major Internet companies who have been caught in this scandal –Google and Microsoft included– Yahoo’s response has been wholly inadequate to the challenge. All of the American companies involved have concentrated on legal defenses and studiously ignored the question of values. That is a mistake that their critics, such as Reporters Sans Frontiers (RSF), are not making. Just last week, RSF administered another slapping with the following announcement (proxy link), based upon a modest research project:

    Yahoo! clear worst offender in censorship tests on search engines

    Reporters Without Borders said it found Yahoo! to be the clear worst offender in censorship tests the organisation carried out on Chinese versions of Internet search engines Yahoo!, Google, MSN as well as their local competitor Baidu.

    The testing threw up significant variations in the level of filtering. While yahoo.cn censors results as strictly as baidu.cn, search engines google.cn and the beta version of msn.cn let through more information from sources that are not authorized by the authorities.

    ***

    The press freedom organisation is particularly shocked by the scale of censorship on yahoo.cn. first because the search results on “subversive” key words are 97% pro-Beijing. It is therefore censoring more than its Chinese competitor Baidu.

    The accompanying spreadsheet can be downloaded from RSF here.

    As a PR practitioner, Imagethief is well acquainted with the PR research study, and RSF is nothing if not masterful at PR. Media love a good study, especially if it smacks of statistical authenticity and touches nicely on a controversial topic. In fact, last week’s issue of the PR industry weekly “The Holmes Report” devoted itself to a condemnation of PR studies, due to the alarming number of shoddy studies and the ease with which statistical illiteracy can be taken advantage of. Naturally, RSF’s study, cursory though it was, has been widely reported upon in the mainstream media, along with RSF’s sharp messages. Wired News carried the following money quotes from Julien Pain, RSF’s “Internet Freedom desk chief”:

    “We simply found out that Yahoo was even worse than its local competitors,” [said Pain]. “Google.cn is censored, but it’s far less than what Yahoo does.”

    ***

    “Yahoo has absolutely no respect for freedom of information,” Pain said.

    Ouch. In fact, that’s probably not true. The guys at Yahoo probably have a lot of respect for freedom of information, and they’re probably wondering how they, a bunch of well-meaning California nerds and one ex-Hollywood mogul, got themselves into this situation and how they can get themselves out of it with minimal damage . However they’re not communicating any of that doubt to the media, who have been resolutely stonewalled in their attempts to secure comment on this report from Yahoo. A scan of Yahoo’s press releases and media information shows no acknowledgment that this report exists at all. For a company that is all about new media, they seem pretty blind to the consequences that not engaging with their plugged-in audience about this issue may have on them. Have a look at the 1300 link cloud for Yahoo+China on Yahoo-owned Delicious.

    Just because the study is cursory and shallow doesn’t necessarily mean it is wrong. Rebecca MacKinnon has done a long and interesting post examining RSF’s results and attempting, with some success, to replicate them. She supports RSF’s overall conclusions, and makes an important point which strikes at the justification that the US Internet companies and even I have wielded in support of their continued presence in China:

    This issue of who is responsible for the loss of service problem, however, does not detract from RSF’s clear and in my view correct point, which is that the Chinese user is probably no better off with Yahoo! being in China than if it ceased operating there.

    If Yahoo! is going to keep on like this, they might as well just change the name of their Chinese service to that of their Chinese partner Alibaba,which now runs Yahoo! China anyway. Then at least they’d be a bit more honest with Chinese users about what they really are.

    More seriously though, the biggest concern is that according to my sources in the industry, Google and MSN are feeling a lot of pressure from Chinese authorities to be just like Yahoo! China. Employees of certain competitors do not hesitate to tattle on Google and MSN in order to gain competitive advantage. So the point is this: Unless companies band together and push back against Chinese government censorship pressure, it’s going to become a very rapid race to the bottom.

    The emphasis above is mine. As compelling as Rebecca’s point is, there is a weakness in suggesting that the main competitive benefit that overseas search engines offer Chinese users is access to controversial information censored by the Chinese government. That is counter to how the vast majority of Chinese surfers will use these services. It also assumes that the search engines are equal in all other respects which, as any user of search engines knows, is simply not the case. A Chinese user who is researching a completely mundane topic may still find that Google’s Chinese service or Yahoo China provides more relevant results than Baidu or Sohu or another Chinese search engine. So far, US Internet companies have been scrupulous in not suggesting that their prime benefit to Chinese users is access to controversial material, a move that would likely be poorly received by the Chinese government. But nor have they done a good job of articulating what benefits theydo bring to Chinese users. Combined with their failure to adequately address the moral conundrum of operating in China –as opposed to the legal conundrum, which has been beaten to death– they have left a nifty vacuum for for their detractors to fill. They do not, nor have they ever, controlled this debate.

    That aside, Rebecca is bang-on in suggesting that Yahoo China might be more honest if they changed their name to Alibaba Search. This cuts to the heart of Yahoo’s problem in China: it doesn’t actually own or control Yahoo China. Rather, it owns 40% of Chinese Internet company Alibaba, which it bought as part of a deal widely interpreted as paying Alibaba to take the failing Yahoo China portal off their hands. Right now that is looking like the worst billion dollars they ever spent.

    Let’s be clear: Alibaba is not evil. It’s a perfectly fine Chinese technology company run by a flamboyant Chinese entrepreneur, Jack Ma. The company does nothing sinister (at least, not that I am aware of). It simply operates the way it has to as a Chinese company subject to Chinese laws. Although it is now based in Hong Kong, it was founded in Hangzhou, Mr. Ma is Chinese and its pedigree remains thoroughly Chinese. Although some aspects of the business are international, including the English language version of its namesake trading portal, most of its services are China oriented and most of its success comes from China.

    The original Yahoo press release announcing the deal with Alibaba makes heartbreaking reading in retrospect. So much optimism. It also suggests why Yahoo Corp will continue to have problems with Yahoo China. Yahoo Corp owns 40% of Alibaba, with 35% voting rights (a minority, it scarce needs be pointed out). Yahoo holds one of four board seats, against two from Alibaba and one from Softbank. Essentially, they’ve surrendered management of their brand in China to an organization over which they have little control, and which has, in turn, little stake in what happens to the Yahoo brand everywhere else in the world. Yahoo China is a bit player in the China portal scene to begin with, and –taking my colleagues as a sample– your average Chinese Internet user is completely inured to outrage over Internet censorship, which is seen as an essentially normal part of government function and a minor inconvenience to be dealt with as best as possible. (This also raises the interesting question of how the role of journalists is perceived in Chinese society, and how that perception differs from the the Western “fourth estate” role that is at the core of RSF’s mission and assumptions. But that’s a topic for another time. For the record, I’m a fan of the “fourth estate” approach.)

    As for Mr. Ma’s personal stake in Yahoo’s PR problems, an acquaintance of mine, a seasoned Chinese PR pro with long experience in the China technology industry, summed up the situation thus: “Jack Ma’s baby is Alibaba. He doesn’t give a shit about Yahoo’s problems in the United States.” It’s hard to know how true that is without being able to peer into Jack Ma’s skull (a privilege I’ve not been afforded), but it’s certainly believable.  But what’s definitely true is that the average western Internet user doesn’t know or care about the ownership and control structure of Yahoo China. For them, as for RSF, the Yahoo brand is monolithic. Yahoo’s transgressions in China are Yahoo’s troubles globally.

    So what is Yahoo to do?

    What if?
    Last week I had lunch with another China PR pro from a competing company. As you do in these situations, when the Diet Coke begin to flow and tongues loosen, we got onto the topic of US Internet companies’ travails in China. We talked a bit about Sergei Brin’srecent woolgathering about whether Google had made the right decision in going with Google.cn. In the course of the discussion my dining companion suggested that Google ought to follow through on Brin’s statement, close Google.cn and tell American and European audiences that it had been a mistake to compromise their principles to enter China. A retreat, yes, but one that might boost their brand significantly overseas at the debatable cost of the business opportunity for them in China. (Like all other US Internet brands in China, Google does not lead its segment. eBay, Yahoo China and MSN China are similarly second best or also-rans in their respective spaces.)

    Let’s transplant that discussion to Yahoo. What if Yahoo simply kissed-off China? I am not a financial expert, I’m a spin doctor, so take all the following with a grain of salt. Yahoo would have to divest themselves completely of their stake in Alibaba, or announce their intentions to do so within the limits of their contractual obligations. Alibaba isn’t publicly traded, so this would mean finding a private equity buyer or buyers willing to spend probably less than what Yahoo paid to take the stake off their hands (they’d smell a distressed sale) . Alibaba already returned Yahoo’s capital to shareholders, so, although Mr. Ma may be the largest shareholder and, thus, the largest beneficiary of that distribution, Alibaba itself might not be able to buy the stake back unless they took on debt to do it. Yahoo’s ability to sell on their Alibaba stake might also be subject to the approval of Alibaba’s majority shareholders, which could complicate things. But an announcement of intent could be the first step.

    Part of the deal would have to be that Alibaba drop the “Yahoo” brand name from the China portal. Since, despite its struggles in the China market, there is perceived value to the Yahoo name they would probably be able to wring some extra concessions from Yahoo. Forget for a moment that Yahoo essentially paid Alibaba to take over Yahoo China — that wouldn’t matter any more. Yes, Yahoo would pay to get in and pay to get out. That’s price of not seeing this coming. Yahoo would officially withdraw from China and close their China rep office, if they still have one. They would maintain Yahoo Hong Kong and a simplified Chinese site hosted offshore and carrying the full contents of Yahoo’s index. If the Chinese government chooses to block it, so be it.

    Yahoo’s management –by which I mean the founders and the CEO– would also have to publicly explain their decision in terms of values, and what role they see for Yahoo in society. They would also have to review their operating policies in less visible cases of censorship around the world (although a quick glance at the map shows few other Yahoo locations likely to be as problematic as China). It would be a hard climb-down, but necessary.

    As part of this, they could create and publicize a clear manifesto of what conditions Yahoo will operate and offer its services under, and what position it takes with regard to Internet censorship. Ideally, these would be clear and uncompromising. I notice that there is nothing of the sort on Yahoo’s “core values” statement.

    What would Yahoo lose? 40% of Alibaba at the cost of a few hundred million. Not chump change, but probably not lethal for a company that has bought Flickr, Delicious and such in in the past year and that had nearly four billion in the bank at the end of Q1. They’d also say goodbye to a China market in which, let’s face it, they were destined to be a bit player for some time to come. Possibly forever.

    What would they gain? An end to these brand-scarring attacks from RSF and other NGOs, a chance to climb back on the moral high horse and to claim to have set an example for other Internet firms. A chance to remind everyone, under the banner of the Yahoo brand, of what is best about the Internet and what it can bring to people. A chance to show that there are limits to the compromises they are willing to make. A chance to take back control of this issue and make Yahoo the visible advocate for an uncensored Internet. So, what is their brand worth to them?

    As further mental exercise, imagine if all the US Internet companies operating in China did the same thing. It would be a shocking public rebuke to a Chinese government that is increasingly image conscious in the run up to their 2008 coming-out party. It would be a reminder that if China really wants to be an enduring International business power, it will have to think about what global integration means in terms of access to information. The Chinese government would not, of course, be expected to make any accommodation for the moral qualms of troublesome foreign Internet firms. But as the Internet becomes an increasingly important tool for doing business it would have to ponder the level of inconvenience it is willing to foist on international businesses that are used to doing business in China much as they would in any other country. (One other thing that my lunch companion and I discussed was the theoretical possibility of Google setting up a paid “premium” service for business customers in China, operating from a separate, private URL and providing full, uncensored access to Google’s services. Think of it as the poor man’s Factiva.)

    Back to reality
    Nothing on the scale of what I have suggested will ever happen. Time to put the comics away and come back to reality. We live in a world of compromise, and businesses are master compromisers. That’s one reason why PR people are seldom out of work. Any company that did what I suggested above could expect to find itself banned from China for the foreseeable future. In Microsoft’s case, this might extend to their bread-and-butter software sales, which are looking up in China after several dismal years. The China market still glitters too much for Internet firms to write it off, and most are willing to bend their principles in the name of grabbing a handful of that glitter.

    But one firm that has found itself back-footed for months, and which has increasingly little to lose and much to gain, might still consider it.

    Disclaimers
    Imagethief does not service any American Internet firms that operate in China.

    Imagethief has generally been a supporter of US Internet firms entering China, even considering the compromises they have to make. His oft-stated belief is that it is better for them to be here than not, and that more choice is always good. On the other hand, he is not averse to reviewing that stand from time to time.

  • The Harbin water crisis

    A couple of days ago, in response to a link I posted to his roundup of articles on the Harbin water crisis ESWN put this comment up on my site:

    As you are the PR expert, how would you have managed the situation? Would you have own up to the benzene problem way up front? Alternately, how would you handle the ‘clean-up’ afterwards? This is a serious matter because they were clearly way, way out of their depth in terms of what they believe that they could get away with.

    Well it’s always flattering to be considered a “PR expert”, although it’s probably closer to the truth to say I play a PR expert on TV. But the Chinese government’s response to the Harbin crisis has been a case study in bad PR management, and, with ESWN’s prodding, I’d like to explain why.

    But first the disclaimers: I am not a crisis specialist. We have hard-core people in my company who do that sort of thing. However, I’ve been doing PR for a while and there are some generally applicable rules of crisis PR that most of us in the industry know. Also, I am basing my analysis on China’s English language press coverage and on foreign press coverage. My Chinese isn’t good enough to get past headlines most of the time, so I can’t comb through Chinese-language press in any depth. Finally, I was not directly involved in this event and, therefore, do not have full information. Bear all of that in mind.

    With that out of the way, let’s have some fun.

    The Event and Coverage
    There are some basic facts that should be reviewed first, along with the history of the press coverage. The explosion in Jilin first happened on Sunday, November 13th. While there was some agonizing about the immediate casualties and the potential for major toxic events posed by shoddy chemical plant construction, there was no hint that this event had resulted in a severe toxic release.

    A China Daily report from November 14, the day after the explosion, said this:

    The local government has kept monitoring the air and water quality in the area, and further investigation into the blast is being made.

    So from nearly immediately after the explosion, representations were being made that the potential toxic fallout from the explosion was being monitored.

    A China Daily search for Jilin + Explosion, which I will use as an inexact proxy for press coverage as it should catch most articles, yields zero results from November 15 through November 22, when the announcement of Harbin’s water cutoff was made. A Xinhua search turns up a similar gap over those dates, except for one story from November 16, which carries the following headline:

    Chemical plant blasts releases no toxic substances [sic]

    The headline is based on an assertion by the Jilin provincial government that there is no problem with air quality. The story makes no mention of water. With the benefit of hindsight, this omission looks suspicious.

    So that’s a one-week gap –at least in English press– when there are no newsworthy public announcements about the potential aftermath of a chemical plant explosion next to a major river that flows through densely populated urban areas and into a neighboring country, except for a patently incorrect or deceptive one.

    On November 22, the announcement of the interruption of Harbin’s water supply is made. Initial reports specifically deny any link between the shut off and the Jilin explosion, as is clear from this China Daily article, the first in English language press to report on the stoppage. The article implausibly cites “maintenance and repair” as the official reasons for a previously unannounced stoppage. Although there is vague mention of the Jilin explosions in official statements cited in the article, any connection is vociferously denied by the authorities:

    The common refrain was that the explosion at Jilin city of neighbouring Jilin Province on the upper reaches of Songhua River may have caused a leakage of poisonous substances into the river as it is only a few hundred metres away from the plant. Harbin is located at the middle reaches of the river.

    But an official with the Harbin municipal government, who did not want to be named, dismissed the assumption as “just a rumour.”

    Harbin Water Supply Company refused to comment but sources at the municipal environment bureau said that there was nothing abnormal with the quality of water in the river.

    In corroboration, Jilin said that the local environment bureau found that the water quality was barely affected after the blast.

    In the absence of hard information, rumors flew through Harbin, stoking public anxiety and leading to a run on stores, as reported in that same article. As reported in foreign press, there was a large, voluntary evacuation of the city. Wells had to be dug quickly in Harbin and massive amounts of water shipped in rapidly.

    Only on the next day was there a Xinhua report confirming that the explosion had polluted the river. Interestingly, the admission is made by a central government agency, the State Environmental Protection Agency (SEPA). This article makes several interesting statements:

    “After the explosion at the Jilin Petrochemical Company under China National Petroleum Corporation, our observation showed pollutants containing benzene had flown into the Songhua River and caused water pollution,” said an official with SEPA.

    Benzene is a substance harmful to human health.

    The official said upon receiving the report, the administration immediately sent experts to Heilongjiang Province to assist local pollution-control efforts. Quality of the river water is under close observation for 24 hours every day.

    The Jilin and Heilongjiang provincial governments have activated their contingency programs for environmental incidents, and have taken measures to ensure the safety of potable water, said the official.

    He said Jilin had quickly blocked entry of the pollutants into the river and discharged water from a reservoir to dilute pollutants in the river. It also organized environmental, water conservancy and chemical experts to discuss pollution control plans, and beefed up monitoring work.

    Most interesting is the assertion that Jilin had “quickly blocked entry of the pollutants into the river and discharged water from a reservoir to dilute pollutants in the river”. This suggests that the Jilin government knew exactly what was going on. Bear that in mind for later.

    Then the inevitable consequences began to unfold. Public erosion of trust in government was one casualty, as reported by the Financial Times:

    “I am fleeing,” said Pang Shijun, a 50-year-old man among the crowds at the central railway station. He said his wife had already left the night before to go to the nearby city of Jixi. “I just do not trust the government to provide true information on this.”

    Whoops. More from Reuters:

    “It’s worrying, because it may not have a strong smell or colour, so you can’t tell when it’s gone,” said Hong Shan, a retired official exercising beside the river. “It’s up to the government to keep us informed. We can’t tell ourselves.”

    Commentators in Beijing and further afield condemned the “lies” told before the authorities revealed what had really happened. A paper in Harbin itself tried to play down the crisis.

    And, of course, there were recriminations. CNPC and the Jilin provincial government have emerged as the principle villains for running the plant and covering up the benzene release, respectively. Here the New York Times reports:

    “We will be very clear about who’s responsible,” said Zhang Lijun, deputy director of the State Environmental Protection Administration, at a news conference in Beijing. “It is the chemical plant of the C.N.P.C. in Jilin Province,” he said, referring to China National Petroleum.

    Mr. Zhang said the investigation would consider whether there was any criminal liability for the spill.

    PetroChina Company, a subsidiary of the state-owned China National Petroleum listed in New York and Hong Kong, is responsible for the company’s domestic petrochemical production, the China National Petroleum Web site says. China National Petroleum holds 90 percent of PetroChina’s shares.

    The official New China News Agency reported that China National Petroleum had apologized. The company “deeply regrets” the spill and will take responsibility for handling the consequences, the deputy general manager, Zeng Yukang, was quoted as saying. The vice governor of Jilin Province, Jiao Zhengzhong, also apologized to the people of Harbin, The Beijing News reported Thursday.

    Zhang Lijun is no champion of transparency, as we’ll see later. Even the China Dailyweighed in, with an editorial yesterday condemning the actions of the Jilin government. They noticed the same thing I did; that the Jilin government has essentially admitted that it knew all along that there was a problem:

    A spokesman from the State Environmental Protection Administration said yesterday at a news conference that Jilin Province and Jilin Petrochemical Corporation had adopted timely measures to stop the toxic spill from being discharged into the river immediately after the explosion.

    This shows that the corporation knew very clearly about the contamination and its possible result but still wanted to keep the secret to itself.

    Leaders from the Jilin provincial government and Daqing Petroleum Administration apologized for the contamination of river water and for the inconvenience and losses the pollution has inflicted on Harbin’s residents. But they never apologized for the hiding of truth.

    We do not know what is behind the cover-up. It might be because they were afraid that they would have to pay money for the losses the pollution has incurred in Harbin, and it might be because they were afraid of losing face.

    But the fact is they have brought shame on themselves by covering up the truth.

    So there is the chronology. Now the fun bit.

    Where They Went Wrong
    No matter how much you prepare and plan, shit happens. That the Jilin chemical plant exploded and released tons of benzene was bad. It could have been incompetence or it could have been plain bad luck. But the actions of CNPC and the Jilin and Harbin governments after the disaster have tarred them with the stink of incompetence and untrustworthiness regardless of the reasons for the original disaster. They were caught in an enormous lie, and that makes everything else they have to say about the disaster untrustworthy. And people will remember.

    Without having been in the boardroom, it is hard to say why the decision to cover up the disaster was made. It may be that Chinese doesn’t provide and incentive for openness about these sorts of things; this is an area where I don’t have enough information to make an informed judgment. Certainly neither the Chinese government nor Chinese business has a great reputation for transparency. The explosion would already be subjecting the plant to scrutiny for safety and operational standards. Perhaps a toxic release would have brought a different level of scrutiny, say from central government as opposed to malleable provincial authorities. And perhaps that level of scrutiny would have turned up some unpleasant truths surrounding CNPC, the plant and the Jilin government.

    All of this is complete speculation. But, of course, that is kind of speculation a cover-up provokes, and why cover-ups are almost always bad PR decisions. I use the phrase “spin doctor” in gentle self-mockery in the subtitle of my blog. Perhaps that’s a mistake, because it perpetuates a myth about PR, which is that it is all about twisting the truth about these kinds of situations. It’s a shame people see PR that way, because a surprising amount of the time, our advice in crises is to be completely honest. And when lives are at stake there is simply no other choice.

    Lives were at stake in this case. The moment CNPC and the Jilin government knew they had a chemical release on their hands they should have first informed the central government (which, scarily, perhaps they did) in order to motivate the appropriate support, and then informed the public. Harbin isn’t the only city along the Songhua river, and every other town along the same way deserved to know what was flowing past their riverbanks.

    How much benzene was released? What are the potential effects? How long will it take to reach key population centers, and how diluted will it be at each stage? What will need to be done to protect those population centers? What help is being offered?

    No doubt people would have panicked anyway, just as they did in Harbin. But after the supermarket shelves emptied out, there still would have been several days in which to prepare alternative water supplies and take other protective measures before the taps had to be turned off in Harbin. And the Jilin provincial government and CNPC, a major government-owned corporation (and, to a lesser extent, the Harbin and Heilongjiang governments), would not have squandered whatever trust people had in them.

    Now, I am applying western PR standards to China, which has a completely different tradition of openness and public communication than developed, western countries. As ESWN pointed out in his comment, the Jilin authorities were clearly way out of their depth in dealing with the crisis and in evaluating what they could get away with. That’s true. And it is a serious problem that the Chinese government needs to solve if it wants development to continue smoothly.

    Government is a Brand, Whether You Like it or Not
    Let’s think of the Chinese government as a brand. This is an oversimplification, but the comparison holds true in many ways. Like all brands, government, in this case Chinese Government (new and improved!), possesses or seeks certain attributes that it believes will help it in the execution of its business. Competence, compassion, pragmatism, security, and so on. For most governments, trust is an essential attribute. The job of governing is easier when people trust what the government tells them and trust that the government will provide essential services and intervene in times of stress or disaster.

    To see how erosion of trust can affect a government badly, look at the current US administration, which has two trust serious issues right now. First, many people saw Katrina as a huge abrogation of trust, and it severely damaged government credibility at municipal, state and federal levels by undermining the compact that the government will help to mitigate severe crisis. Second, a majority of the US public now believes that it was misled about the reasons for launching the war in Iraq. That is eroding public support and making it much harder for the administration to prosecute its plans in Iraq.

    With regards to China, the foreign knee-jerk reaction is to say, “The Chinese government is authoritarian! Why should they give a damn about trust?” But I would wager that most Chinese people trust their government on a fundamental level, or at least want to trust it, and that the Chinese central government places a fairly high priority on maintaining that trust. You can see aspects of this in many of the initiatives the CCP is prioritizing right now. Programs to control corruption and help the rural poor to climb out of miserable poverties are all part of building and maintaining trust. Even propaganda is designed to foster trust in the government. Power may flow from the barrel of a gun, but it is significantly easier to hold onto that power and exercise it effectively when people trust you. The Chinese government is executing several simultaneous, tricky balancing acts. I think they realize that their jobs will be much easier the more people trust them. Unfortunately, they seem unable to break their bad, Stalinist habits.

    Credibility engenders trust, and goes hand-in-hand with it. And credibility is a really serious issue for the Chinese government. Just today, the Chinese government was busyrefuting a report in New Scientist that bird flu deaths in China total over 300. (The Horse’s Mouth blogged the Boxun report that also covered this a couple of days ago – it’s blocked in China.) But people will continue to be suspicious of Chinese government protestations because the track record is bad. If the Chinese government expects to maintain credibility and trust it has to come up with the goods. Statements like this,reported in today’s FT in a good story on Chinese media reaction to the disaster, will not help:

    “There are many ways to release information. Making it public is one way and only informing the local governments and enterprises along the route of the contamination is another,” said Zhang Lijun, a vice-director of the State Environmental Protection Agency.

    The South China Morning Post summed up the Chinese government’s credibility gap (via Howard French’s “A Glimpse of the World”) blog:

    The way in which the affair has been handled raises fresh concerns about the willingness of mainland officials to disclose bad news.

    The PR aphorism is that trust is easy to lose and, once lost, fiendishly hard to regain. That’s why we so often counsel honesty and direct action in crisis situations. So here is Imagethief’s free PR advice to the Chinese government: what works in a closed, Stalinist state does not fly in a modern, open economy. There is no having it both ways. CNPC is a publicly listed company traded in Hong Kong and New York and need to behave like one, even with regards to its operations in China.  The expectations upon you are changing. That is the inevitable price of success, development and integration with the rest of the world. If you expect to continue that success, you will have to learn how you want to communicate around these kinds of events. In the long run, whatever you it is you think you are achieving by trying to hide your disasters, missteps and calamities, you are almost certainly achieving the exact opposite. Honesty in times of crisis can build your credibility. Infinite successful cover-ups add nothing to it. Every failed cover-up destroys it that much more.

    You can only get caught in so many lies before people stop listening.

    Update: Two good roundups of foreign press articles from the Peking Duck, here andhere.

    Also, tough luck if you live in the small villages along the Songhua, as reported by the New York Times here.

    Update 2: This, in particular, is  a good story to read. From the Washington Post’s Philip Pan, it discusses how local journalists broke the coverup story. That’s Chinese media doing its job well. What will be telling is how the Chinese government –especially the central government– reacts. If it is used as an excuse to crack down further on the ability of media to report such things, or if the journalists responsible are punished, it will be a very bad sign indeed.

  • Do you, uh, Yahoo? You’re busted!

    Do you, uh, Yahoo? Not, one would hope, if you’re a Chinese dissident or journalist on the wrong side of the authorities.

    It seems that American technology companies can’t stay out of trouble in China. The last two days has seen widespread coverage of Yahoo!’s alleged implication in the arrest of a Chinese journalist wanted for “releasing state secrets”, which is a euphemism for embarrassing the government, among other things. The BBC has one of the more interesting articles, because it covers the bigger picture without dwelling on the usual shopping list of scare figures, like the 40,000 lurking net monitors (cited in theTelegraph’s coverage – does anyone else notice that number inflating?):

    Yaman Akdeniz is the director of cyber-rights.net, a web-based e-mail service set up in the wake of tighter laws in the UK about the traceability of e-mail communications.

    He advises activists using the web in oppressive regimes around the world to make sure they did not set up accounts with firms which have offices in the country in question.

    “Providers with offices in China have to obey specific rules. We operate in the UK so I don’t have to reply to any requests for information made by the Chinese government,” he said.

    While cyber-rights.net collects no information about its users it is not a completely untraceable way of sending communications.

    If asked by the UK government to supply information in a fraud or terrorist investigation it is likely its parent company Hushmail would comply, even though it is based in Canada and not bound by UK law, said Mr Akdeniz.

    “But if the request was for information about the account of a journalist it is likely it would be more reluctant to comply,” he said.

    I don’t know if Yahoo! is guilty or not, but, as a PR pro, and in the wake of recent scandals concerning the conduct of fellow tech firms Cisco, Google and Microsoft in China, something is clear: there should be a whole category of crisis public relations for tech firms named as complicit in Chinese government censorship or detainments.

    It doesn’t make much difference to those firms’ business in China, of course. For one thing, not many people are likely to hear about it here. But I wonder if it will start impacting technology firms internationally. I think back to noisy, well-organized public campaigns against companies doing business in apartheid-era South Africa, or in Myanmar. So far, the calls against tech firms complicit in censorship (and now arrests) in China have been pretty scattered, and confined primarily to the digerati rather than to the great mass of customers. That might change.

    So far, most of the firms confronted have given variations on the “we comply with the laws of our host country” explanation. This is accurate and understandable, but as a PR holding statement it doesn’t do much to diffuse the perception that western tech firms are knuckling under to a repressive government in search of massive bucks. Just the thing to put college students in a righteous snit. Yahoo! hasn’t issued a statement on this situation that I can find, which is also not a great idea because NGOs like Human Rights Wach and Reporters Without Borders are busy filling the silence.

    I can see the dilemma for big, listed Internet companies. Their shareholders will punish them ruthlessly if they aren’t aggressively pursuing the Chinese market. But to do business in China, they have to submit to the Chinese government, in all it’s capriciousness. These are really media companies – the only foreign media companies allowed to do business here – with real influence over Chinese people and a commensurate level of scrutiny from the authorities. But none of them will dare foresake the market on principles, and that leaves them vulnerable to PR problems whether petty, as in the case of Microsoft’s banning of general words from it’s MSN China Spaces blogging site, or sinister, as in Yahoo!’s possible complicity in an arrest. It doesn’t seem that many of them have thought in advance about how to deal with these problems.

    Sooner or later, these companies are going to have to come up with a better explanation than “just following the law of the land”, or they will end up on the wrong side of a really aggressive, negative PR campaign that will hurt a lot. For the life of me, I can’t think of what that explanation might be; give me some time to work on it. But public statements of principle on matters of free speech and protection of the rights of journalists might be a good start. These are media companies, after all. Manufacturing companies have been down this road with China sweatshops and sketchy contract manufacturers. They’ve had to submit to independent monitoring and create codes of conduct for their contractors. And they’ve been held to account, although not often enough. Could a similar situation arise for the media companies doing business here?

    In the meantime, there is some good advice in the BBC article above. If you’re a Chinese journalist or dissident, perhaps you shouldn’t host your e-mail with a company doing business in China. Perhaps the Electronic Frontier Foundation, an advocacy group for online privacy and anonymity, would care to make some of its very good privacy information available in Chinese.

    Of course, it would probably be blocked…

    Update, Sept 9: And sure enough, Yahoo!’s defence is just as predicted above. From Reuters, via the Australian:

    “Just like any other global company, Yahoo! must ensure that its local country sites must operate within the laws, regulations and customs of the country in which they are based,” Yahoo spokeswoman Mary Osako said in a statement emailed to Reuters by the company’s Hong Kong arm.

    This is meeting the predicable response from Reporters Without Borders, who ask:

    “Does the fact that this corporation operates under Chinese law free it from all ethical considerations? How far will it go to please Beijing?” it asked.

    “It is one thing to turn a blind eye to the Chinese Government’s abuses and it is quite another thing to collaborate.”

    People who read this site know my opinions on the Chinese government’s treatment of journalists and the media. But looking at this strictly from a PR point of view, I think Yahoo! and the other firms will find their “just following the law of the land” defence progressively less tenable. That is because the NGOs and activists targeting them are attacking the morality of the laws that these companies are claiming to comply with. Go back to the apartheid comparison, above. If a company had cited compliance with the law of South Africa in submitting to apartheid, how do you think activists of the era would have responded?

    The explanation still needs to evolve. Expect more trouble ahead.

    Update 2: Other interesting links (both via Peking Duck)
    Angry Chinese Blogger translates the document that got Shi Tao busted. (Proxy link.)
    ESWN dissents on condemnation of Yahoo, although I suspect he will be a voice in the wilderness.