Google vs. China Update

Well, it's been two months and its time for an update on an issue I've been following all along. It turns out that I was half-wrong about Google. Or half-right depending on how you look at it. It seems that Google will shut down its China-based site, yet will retain the rest of its operations in the area. The New York Times reports on it pretty thoroughly.

Long story short, Google must have decided that the cost of government censorship far outweighed the benefits of providing services to the Chinese market. My guess is that another reason why Google isn't outright pulling out is that it is hoping to wait it out until existing policies on censorship change. Another good reason is that by retaining operations in China they can tap into the local market as a long term source of brain power. Like I mentioned in a much earlier post, they can retain a toe in the market. Retaining their Chinese-based operations will keep them current with on-going trends in the Chinese market, helping them to spot a future opportunity to reenter the market.

For Baidu? To the victor goes the spoils. With dominance over the Chinese market, I wonder if over time they will grow to the point where they begin challenging Google internationally.