When Google announced earlier this week that it was the victim of a series of cyber attacks it said originated in China, and that Gmail accounts of human rights activists had been hacked, it might have been the last straw for the company whose informal motto is "Don't Be Evil."
"Google probably thought that they were really good at defending their own networks and it turns out that while they were good, they weren't as good as the Chinese army," said James Lewis, a senior fellow at the Center for Strategic and International Studies.
"Google probably thought they had a deal with the Chinese, so they were a little bit surprised," Lewis said.
Now Google says it will hold talks with Chinese officials in the coming weeks before making a decision to pull out altogether.
But the Internet giant says it has already decided to end the controversial practice of censoring its own Web site in China, a condition required by the central government for doing business in the mainland.
"In the last year or two, the environment has gotten more closed, not more open and so given all of this, we can just no longer in good conscience continue to filter, or to censor our search engine in China," Google chief legal officer David Drummond said.
The recent security breaches have further soured a relationship that was uneasy from its start four years ago. Google was always uneasy about agreeing to restrict access to sensitive subjects such as the Tiananmen Square massacre, Tibetan independence, and the Falun Gong.
While critics accused Google of enabling the repression of free speech in the name of profit, Google said that it hoped that its presence in China might eventually lead to a more open Internet.
"We've seen a number of things that reflect a desire to, on the part of the Chinese authorities, to actually regulate the Internet more and not less, and a more open environment was what we were hoping for and was hoping that we could sort of encourage by being there. But that has just not happened," Drummond said.
Representative Chris Smith, R-N.J., says that Google ignored the warning signs.
"It was right in front of them how they were being used, maybe willingly, by the Chinese dictatorship and they said, 'oh no, no, no.' They thought they were going to be opening up China and I said, 'Then you don't understand dictatorships,'" Smith said.
In February 2006, Smith chaired a congressional hearing in which the executives of Google, Yahoo, Microsoft and Cisco were accused of collaborating with a totalitarian regime for agreeing to terms such as censorship in order to do business in China.
Smith is now sponsoring a bill called the Global Online Freedom Act that would require American Internet companies to disclose what topics they are censoring and would make personally identifiable information even harder for cyberspies to obtain.
He said he thinks Google's stance could have significant impact.
"Google's announcement, I think, was a game-changer. I hope it turns out to be what I expect it to be -- a clear-cut statement we will no longer be complicit and be a partner to the censorship of the Chinese people when it comes to political and religious type of thought," Smith said.
While Google has not made a final decision on whether to leave China, human rights activists warn that the company should expect more of the same if it remains.