Dear Evgeny,
I agree with your analysis, except for one point. 'Only 30%" of the market? I think most companies would give their right arms for only 30% of just about any Chinese market.
I also suspect that Google was, in a sense, naive. When they first went into China they realised that they were compromising but I doubt they were at all conscious of the wider political and commercial context and where that compromise might lead. Until recently Google as a company has not had a very sophisticated capacity for analysing those external issues as they relate to their business.
For me, this is still something of a mystery, for all the reasons you point out, but also because it doesn't make 100% sense either as an idealistic gesture or a cynical ploy to exit a difficult market.
Perhaps they did this merely to make your talk at Polis yesterday super-topical!
cheers
Charlie

Dear Evgeny,

You are very correct in your articulation about Google's proposed exit from Chinese markets. Well, most of Western companies went headlong into Chinese markets without reading the long FINE PRINTS at the bottom of each contract! Germans learned the Chinese lessons the hard way, as their technology Magnetic Elevated Line train was hurriedly contracted by Chinese before the Beijing Olympics. Later Chinese just reverse engineered the whole system without paying a dime as patent to Germany!
What a change, a poor communist Russia was outcast because of "Evil Empire" status, while China an economic giant is an "acceptable Empire" to many Western corporations, though both have no legal protective mechanism in place!

In the past Google i believe have always intended to adhere to their do no evil policy, but things have changed within the recent years. A much more advert/money/monopoly mentality seems to have emerged from within the googleplex. Although cynics may point towards this as a saber rattling, but at least it raises global issues with the world and the Chinese government about their information policies.

Google is becoming increasingly under attack in the recent months. Sarkozy and france are trying to strip them of their savings by attacking their ad revenue and taxing it. Several other countries have also engaged in law suits against Google in an attempt to siphon off a wedge of cash.

I think the huge point you're missing is that these aren't just cyberattacks from random people in China.

The big implicit suggestion in the statement (that will never be stated explicitly) is that the cyberattacks were state sponsored. You say there are cybercriminals in every country, but these objectively different, criminals looking to make money, not active state sponsored hackers looking to gain political and competitive information.

If the Chinese government was behind attacks seeking both human rights activists information, and (rumoured) source code and competitive information from Google itself, then continuing to do business in the country with such strong state regulation *is* an issue.

The cyberattacks are an epiphany because the Chinese government changed the game. They're not regulating Google, they're actively attacking them.

Now, dropping censorship is only a direct response in that it's the concession Google made to the government in order to do business. So, Google is saying fine, if you want to attempt to hack us, we refuse to comply with this restriction, with the inevitable result of being blocked by the Great Firewall and getting kicked out of the country. If they're going to leave anyway, they might as well make it for a reason gaining them good PR, rather than just "We cannot operate with the Chinese government attacking us."

There are all kinds of other calculations, I'm sure, to do with market share, current and future profits, short and long term PR gains and so forth. But the idea that they're just using this as an excuse to get out of China seems incredibly odd. It's the only thing that has really changed since they entered the market, otherwise how is the calculation different from 2006?

I heartily agree with Moocow.
There's another aspect of this that I haven't heard talked about much (but admittedly I've been too busy to read very much about this since the story broke).
I'm referring to the horrible treatment that Google has been subjected to within China for at least the last year. The government overtly favors Baidu, and has been doing everything in it's power to promote that search engine over Google. For example, there was the anti-pornography campaign recently. Featured in news items about it was how Google's "auto-complete" feature made lewd suggestions. For example, type in "son" and you get the suggestion "son and mother sex" -- that kind of thing. It was exposed not long after, though, that there was an orchestrated campaign to seed Google's suggestion mechanism with those lewd phrases -- thousands of users from Beijing and it's environs were entering those phrases into Google's search box for the weeks leading up to that story breaking.
That's just one example.

Remember Kopenhagen? China's government seemed to be so strong. Wen would not even talk with Obama. And every comment about Kopenhagen dealt with the shift of power from the west to the east. But there's one sweet weak spot. And it's the only threat the chinese goverment is fearing - uprisings, "disharmony", riots. Put one and one together and you get the picture...

You seem to be reading this as primarily a story about Google (understandable, since this is a tech site): "I don't really understand all the enthusiasm about Google's move." Perhaps the enthusiasm is more about the high-profile public embarrassment for the Chinese government.

I agree with some posters that there is a slight contradiction in the reasoning here.

The inference, although not explicit, from google is that they are fairly sure that the Chinese cyber-attack, or whatever it was, was an official thing, not a case of some deniable hackers (the Chinese govt's normal modus operandi). Perhaps google have used their techno-wizardry to find out something that they haven't made public yet (or perhaps have chosen to never make public).

Another thing is that Google were always in an uneven battle with Baidu, not just from government support for Baidu, but because Baidu have a much more "Chinese perspective" on copyright infringement and linking directly to pirated materials...

In China,the Chinese government obviously favored Baidu.In the campaign of cleaning cyberspace,Chinese government criticized that Google linked with some vulgar information,but it's easy to use Baidu to search the same vulgar information.It's not because Baidu have some national perspective.The true reason is that Baidu is a little puppy of Chinese government and Google is not.The real purpose of the ant vulgar information campaign is to clamp down the free speech in the cyber enviroment.

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