Google has threatened to withdraw from China after a cyber attack out of China tried to break into the Gmail accounts of human rights activists. They also targeted twenty other companies. In a blog post Google said it experienced a “highly sophisticated and targeted attack on our corporate infrastructure, with the probes originating from China” beginning in mid-December, which it said resulted in “the theft of intellectual property”.
They also cited attempts by the Chinese government to tighten censorship. Google said it was prepared to pull out if it was not permitted to run its local service without further censoring. U.S. Secretary of State Hillary Clinton called on China “for an explanation” of Google’s allegations. “The ability to operate with confidence in cyberspace is critical in a modern society and economy,” Mrs. Clinton said.
In June 2004 Google bought a 2.4% stake in Baidu, China’s biggest search engine, Baidu. Then, in April 2005, it paid a cyber-squatter for the google.cn domain name. Google entered the China market in 2005 and set up a China research and development center in July 2005. They launched google.com.cn in January of 2006. On their blog they state ‘At the time we made clear that “we will carefully monitor conditions in China, including new laws and other restrictions on our services. If we determine that we are unable to achieve the objectives outlined we will not hesitate to reconsider our approach to China.”
Google appointed Kai-Fu Lee, a Microsoft corporate vice-president, as Google China president and head of the new center which led to a lawsuit. Microsoft settled out of court with Google in December 2005. Terms of the agreement were not released. Dr Lee left Google in September of last year.