Google will maintain a presence in China but this may slim down
On 22 March Google started re-directing visitors to a Hong Kong site in an attempt to get round Chinese censorship of search results.
The decision comes after Google's talks with the Chinese government about censorship of search results broke down.
What has Google done?
Google has effectively shut down the Google.cn domain. This means that anyone in mainland China who wants to do a search via Google will be re-directed to the Google.com.hk page.
Google said it had took the step because of the censorship that applies to searches done via the .cn domain. This can mean that finding out information about controversial topics, such as events in Tiananmen Square in 1989, is very difficult.
But isn't Hong Kong part of China too?
It is. However, it has far more freedom to order its affairs than on the Chinese mainland. While any firm signing up for a .cn domain has to abide by the laws governing China, the same is not true of the .com.hk domain.
As a result by piping queries through its Hong Kong servers, Google hopes to provide uncensored results in a way that does not violate Chinese law. Google has been offering uncensored search services out of Hong Kong for several years.
Will it work?
It is too soon to say.
China has condemned Google's move, said stopping censoring search results was "totally wrong" and broke a promise the company made when it set up shop in the country.
Google also acknowledges that China could easily retaliate by blocking access to all services and end the feed of uncensored results. There are suggestions that China is already filtering results from the .com.hk.
China also operates a sophisticated national firewall which could mean that some of the searches carried out via Hong Kong return filtered results.
It also has dedicated cyber policemen who patrol online discussion forums to ensure banned topics are not discussed.
Why did Google take this step?
The genesis for the change was Google and many other Western firms being hit by what it described as a "sophisticated" attack on its systems. While it lost some intellectual property during this attack, its investigation revealed that the attack was aimed at getting at the gmail accounts of human rights activists.
In light of this Google began talking to the Chinese authorities about how to operate in the country without having to censor results.
Those talks broke down because, Google said, the Chinese government made it clear that "self-censorship is a non-negotiable legal requirement".
Is Google pulling out of China completely?
No. It is keeping up R&D in the country and also maintaining a sales force. However, it admits that this sales force might shrink if the number of people using its search engine diminishes. Currently it has about 700 people working in the country.
Will this move mean Google loses a lot of money?
Not straight away. Estimates suggest a maximum of 2% of Google's $24bn (£15.9bn) turnover comes from China. Much of that cash does not come from ads on the Chinese search site. When it comes to search in China, Google is a poor second to Baidu.
However, China already has the world's biggest net using population despite the fact that the percentage of Chinese people using the net is far lower than in many other nations. China's net users are only going to grow and become more sophisticated. One of the world's biggest net companies pulling back from what will become the biggest net market is likely to hit its growth at some point in the future.
What about other Western net firms in China?
No other net firm has taken the same action as Google. Yahoo, Microsoft and many others still operate on mainland China. They filter search results and censor the blogs and discussions carried out on their services.
In the past some of the net firms have passed information to the Chinese authorities that has helped them track down dissidents.
In February 2008 hi-tech firms such as Facebook, Apple and Amazon, gave a pledge to balance human rights with official calls to filter results. The US government is looking into how well the initiative has been working.
Are there other countries where Google censors results?
Yes. Google has a history of complying with national laws on language specific sites but offering uncensored results on the main .com domain.
For instance, Google.de does not return results that conflict with national laws governing information about the Nazis. That information is freely available to anyone within Germany who goes to the Google.com site.