Google Vs China - Is It A Bluff?

China is already fairly infamous for their attempts to control the flow of information online and keeping a Big Brotherly eye on people's actions online.  In recent news, Google and China have been butting heads over Google's censorship of searches for China's and recent hacking attempts on the emails of dissidents. Google has ultimately threatened to pull out of China. There is of course more to the story than we're being told, but this strikes me as a very odd move on Google's part.

There are a total of approximately 300 million internet users in China, pretty much equal to the population of the US. In China, the biggest search engine is Baidu with control of roughly 60% of internet searches and Google with around 30%. I'm just giving a rough estimate because even on the Financial Post these estimates vary (1). You have a multi-billion dollar company like Google in a market that is very difficult to enter and has extremely high future growth and you think they really intend to pull out of the market? Strategically it does not sound like Google is making a very credible threat. By standing against China, Google is positioning themselves as a politically charged entity when they should be remaining a neutral party. A search engine that caters to everyone should have no biases.

Jan 18th Update: It's been four days and it seems Google is still censoring search terms for the Chinese side of the internet. Will they follow through and exit the Chinese market? We will keep on watching for further developments.

Jan 20th Update: China has struck back at Google, accusing them of being a mouthpiece for the US. I wonder if the Google usage rates in China have been shifting for the past few days in favor of Baidu and other search engines. Google repositioned themselves on a political level and as a result have alienated a highly politically sensitive segment of their users.