In a rather surprising move, Google said it might exist from China.

“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. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China,” said David Drummond, SVP, Corporate Development and Chief Legal Officer in a statement. (Reference link: http://googleblog.blogspot.com/2010/01/new-approach-to-china.html)

If that is the case, it will a major setback to its effort in China, the world’s largest internet market. Since it started Google.cn and its China office in mid 2005, Google has gradually improved its services in the country. (See earlier posts:
New Broom may sweep Google China ahead, Google, Baidu do battle in China’s 3G frontier) Recently, it was able to gain market share from the leader, Baidu. According to Analysys International, Google had a 35.6% share of market in the fourth quarter, compared to 31.3% in the third quarter, while Baidu’s share fell to 58.4% from 63.9%.

All these effort will be wasted if Google start bargaining with Chinese government, which is unlikely to win the search giant any concessions from Beijing censors.