Google made $200 million in China last year, a small but strategic piece of its global plan for the future. But Google has only 30 percent of the market in China, compared to 70 percent for Baidu. Some critics argue that Google is using the hacking as an excuse to pull the plug on a losing business.
"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," Google's Drummond said.
It's possible that the Chinese government will make some concessions to convince Google to stay. But the argument most commonly expressed by Chinese officials is: foreign companies must abide by Chinese laws if they want to do business here.