Google vs. China

News:
Google suspects Chinese government hacking its website and vows to leave the Chinese market to stand with its principles: freedom of speech and freedom of press, if China doesn’t loosen its control.

Thought:
Chinese government seems like not going to back off. If Google leaves the world’s biggest internet market, its long-term earning potential will be greatly hurt; besides the direct impact on its search business, its nascent mobile phone and other businesses may be affected as well. Thus, it is interesting to see if Google will really take the action without compromise. The Chinese rivals will be benefited and happy with the Google’s departure. The stock of the largest internet company in China, Baidu (with 58% of market share), has shot up ~$80 (20%) in just two days after the news broke out. However, without Google, the internet development in China will not be as good.