After months of threatening to leave China because of intrusions from hackers and a dispute over censorship, Google finally stopped censoring its search results in China in defiance of the government. Google now redirects Chinese users to the uncensored pages of its Hong Kong website. This decision appears to have angered Chinese officials, who have highly criticized this move by the technology powerhouse.
While google.cn has stopped working, Google will continue to operate online maps and music services in China. This limited presence by Google may have long-term repercussions on Google’s global reach ambitions, as Google currently competes with Baidu - a Chinese home grown company that holds the major market share in China. Commentators have also discussed the repercussions on the many Chinese users of Google. The fact that Google may lose its presence in China could potentially isolate millions of web users in China from the rest of the world.
It is not currently known whether Chinese regulators could block Google’s Hong Kong search engines completely. Regulators currently block YouTube, Facebook and Twitter. Google entered the Chinese market in 2006 under an arrangement with the government to purge search results on banned topics. Google has since struggled to comply with the Chinese censorship rules.
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http://www.nytimes.com/2010/03/23/technology/23google.html