Google has always had a hard time in China but now they seem to have had enough and wants change. Google just announced on their official blog that they would start ”a new approach to China”. Google implies that Chinese governments might have something to do with the following three crimes:

1.  A cyber-attack in mid-december on Google and ~20 other companies
2. Google claims to have evidence that the main goal of the attack was accessing Gmail-accounts belonging to Chinese human right activists.
3. The follow-up investigation on the cyber attack by Google also revealed that several e-mail accounts used by human right activists in US, China and Europe has been continuously accessed by a third part that initially got login-information via phishing or malware on their target’s computers. [Thanks to @nikkelin for summarizing the points in Swedish.]

Google has because of this opened up their censoring somewhat, one example being pictures of Tianmen Square crackdown that were not available earlier.  They also say they might cease doing business in China if they can’t find ”a new approach to China”.

”These attacks and the surveillance they have uncovered–combined with the attempts over the past year to further limit free speech on the web–have led us to conclude that we should review the feasibility of our business operations in China. We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China.”

Another important point that didn’t come out in the official Google blog post was revealed on Wikileaks saying that:

”gossip inside google China is gov hackers found infiltrating google source code repository; gmail attacks an old issue.”

The possibility of Google moving out of China becomes very interesting when you look at the Baidu vs. Google war for the Chinese search engine market. In China most people prefer Baidu because of them providing a better service for the Chinese. If google pulled out it would most likely mean that Baidu got almost all of those searches. According to Jennifer Li, Baidu’s chief financial officer, their share of the market for search was 77% in the 3rd quarter (+1.4% from 2nd) and Google’s share was at 17% in the 3rd quarter (-2% from 2nd). I believe these numbers are related to the stock market but it still shows a negative trend for Google if they are true. Democratic ideologies don’t stand a chance before financial capitalism.

Another market loss for Google would be the one in mobile phones. Google announced a partnership with China Mobile in 2007, China’s largest cell phone operator, to provide mobile search and has been dominating the mobile market. At the end of October Baidu announced signing a partnership with China Unicom, the second largest cell phone operator. China Unicom are predicted to grow to 50% of the market by 2011. This must affect Google’s part of the market share for cell phone searching negatively and should be evident to them at about this time. Source

Another factor that might be contributing to their new approach to China is the recent negative media coverage Google received in combination with Bono’s filesharing hypocrisy and praise of Chinese censoring. ”Google’s currency is user trust” ”Simply put, China is one of Google’s weakest markets”. The censoring might get worse if Google does decide to pull out of China, an example of what might come:

Go to baidu.com – Search for anything. Then search for ”google.blogspot.com” You are now totally blocked from Baidu (via @azaaza)

There are often a lot more reasons then the official ones if you start looking. This will be very interesting to follow with big changes to come if Google gets a change in their approach to China OR if they pull out and Baidu is allowed to have a ”monopoly” on the search market in China.