Google recently posted on their blog that they are considering pulling out of the China market and closing down google.cn.

The gist of the story, if you still haven’t heard of it, basically, they recently suffered cyber attacks from super high-tech hackers, on top of the recent conflicts they’ve been having with Chinese writers with Google Books, not to mention June’s 2009 incident where Google was shut down for a couple of hours due to “porn” being shown through Google results.

Anyways, now Google seems to be completely fed up and willing to walk away from their China operations, which have been rumored to generate around $300 million dollars in revenue in 2009 http://www.nytimes.com/2010/01/15/world/asia/15google.html

Others argue that even though Google’s market share is so low, only around 30 some percent, the Chinese Internet market is huge and growing amazingly fast, so future profits would be too big for Google to leave behind. Google has commented that this isn’t a PR campaign, nor are they considering pulling out because of profits being low or not having enough market share,  but they claim that they are actually doing it because they no longer want to continue censoring their results.

Ultimately, in the west, Google is mistakenly seen as a hero for standing up to a country whose Government and culture we understand very little about and due to that often fear, and show a lot of disrespect towards. Which sets the way very nicely for Google in the future with their plans of “world domination.” All jokes aside, what’s interesting is the show of differences and similarities between both Chinese and American culture.

I’ve read countless of comments praising Google for not willing to follow Chinese law, or for no longer willing to cooperate with what they think to be an “evil” government. On the other side, I’ve heard from Chinese people who feel that they don’t need Google, nor any westerner who thinks himself so righteous and all-mighty to quickly criticize the Chinese way of life and the Chinese government. Keep in mind that western studies held in China have determined the government’s approval rating to be around 70-75%. Some other Chinese think they can do fine and well on their own without a foreign company trying to dictate them how they should do things.

Whether or not Google leaves remains to be seen. What’s a bit scary is the technology that was developed to pull off hacking into Google, Yahoo, and other large corporations. McCafee released a statement in their blog make sure you read up on it, because this truly marks the beginning of a new kind of war looming around if we don’t change our behavior and all start working together as a global community.

So what will it mean for China and the world if Google does leave?

Ultimately, the Chinese government won’t mind much. They will let Google go, but they will try to create new policies to make sure other Multi-national companies do not feel afraid of doing business there. This might pave way for new policies protecting technology companies, since right now China has a huge initiative to encourage technology developments, technological schools, such as the countless software colleges now recruiting foreign talents, etc,  they will make sure that investment is safe.

 Furthermore, the Chinese government will probably crack down on these free-for-all proxies that have been a flock of illegal activity to show the world that they are moving forward to responsible development and show the world they would be a suitable country for leadership. Hackers will just end up using Proxies on other countries in the world where policying of the Internet isn’t as strict, and we will continue to battle cyber-espionage, and cyber-wars for years to come.

I’m pretty sure that business will go on as usual. Critics of China will continue to criticize instead of learning to understand the culture better, and China will continue it’s economic trends.

As for the gaps left behind by Google, Baidu will probably increase their share up to 70%, the rest of the people whom had been won over from Baidu to Google will find alterior means of search, which will lead the way to Bing gaining a larger share, probably around 5-10% by 2011.

I expect a larger number of Chinese will learn how to access resources outside of China, or what they call “jumping the [Great] fire-wall,” so they can get unfiltered results from Google.com, and the internet. But I don’t think that will create any instability from within China.

-Edit – 1/16/2010

Inside Story with a word from Google Inc.