It's a huge story. If anything comes of it (they may backtrack yet) it's reversing what was regarded as unstoppable business development. The BBC analysis bit sums it up:|
The assumption has always been that the China market is too big to walk away from.
Foreign firms accept the difficult commercial conditions, the tough competition, government interference or censorship because the prize is worth it.
The story has been updated with some more figures:
Nearly 340 million Chinese people now online, compared with 10 million only a decade ago.
I'm not sure what they could be thought to gain by blowing $600m on a publicity stunt, or by simply giving up on the basis of restricted opportunity, and thus allow Microsoft to pick up $600m worth of restricted market.
Last year, the search engine market in China was worth an estimated $1bn and analysts previously expected Google to make about $600m from China in 2010.
But unlike most markets, Google comes second in search in China.
It has 26% of the market compared with about 60% controlled by market leader Baidu, which has a close relationship with the Chinese government. Yahoo has 10%.
Microsoft has a tiny share of the Chinese market with its new Bing search engine, but in December the technology giant said it was committed to China, calling it "the most important strategic market".
Plenty of time for them to backtrack and look stupid yet, but I don't think this story is as unsignificant as some think. It could develop further yet, as other companies are allegedly affected, and the secretary of state has become involved.
Once an eagle taught me courage. And I will never forget that day