Google May Close China Site After ‘Highly Sophisticated’ Attack

From Businessweek:

Google Inc., owner of the most popular Internet search engine, is considering shutting its Chinese Web site and offices after discovering a “highly sophisticated” attack last month aimed at gaining access to e-mail accounts of human-rights activists.

In investigating the attack, Google said it discovered that at least 20 other large companies in industries such as finance, technology, media and chemicals had been targeted. The company also said it plans to stop censoring results on its Google.cn site and hold talks with Chinese authorities.

“We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China,” Mountain View, California-based Google said. The company said it is notifying other companies that were attacked and is working with U.S. authorities.

Google has clashed with the Chinese government since it started a censored version of its site four years ago in the country, which leads the world in Internet users. Any plan by Google to leave China would benefit Baidu Inc., the leader in the market, said Erwin Sanft, an analyst at BNP Paribas in Hong Kong.

“There’s no other competitor, so if Google pulls out, Baidu is left by itself,” Sanft said. “If they pull out of China, it’s very hard to really get back in the market and still have a similar presence.”

The move signals Google is hewing closer to its “Don’t be evil” motto, said Heath Terry, an analyst at FBR Capital Markets in New York. Still, Google is still a “long way away from getting out of China,” Terry said. The company can threaten to leave the country because China accounts for such a small piece of Google’s sales, he said.

Full article:
Google May Close China Site After Highly Sophisticated Attack - BusinessWeek

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