From BBC    13 January 2010

Internet giant Google has said it may end its operations in China following a spate of attacks on e-mail accounts.

Google, while not accusing Beijing directly, said it was no longer willing to censor its Chinese search engine.

Commerce Secretary Gary Locke said China must ensure a "secure" commercial environment for Google and other firms.

"The recent cyber intrusion that Google attributes to China is troubling to the US government and American companies doing business in China," Mr Locke said in a statement.

Censorship

He said the incident should be just as troubling to the Chinese government and added that he had personally raised the issue with Chinese officials.

He said during these discussions he had emphasised the importance that US President Barack Obama placed on "the full and free flow of information on the internet".

Google has said that closing its google.cn site could mean it would shut its Chinese offices.

Google said the e-mail accounts of Chinese human rights activists were the primary target of the attack, which occurred in December.

The search engine has now said it will hold talks with the government in the coming weeks to look at operating an unfiltered search engine within the law in the country, though no changes to filtering had yet been made.

Google launched google.cn in 2006, agreeing to some censorship of the search results, as required by the Chinese government.

It currently holds around a third of the Chinese search market, far behind Chinese rival Baidu with more than 60%.

Email targeted

In a blog post announcing its decision, Google's chief legal officer David Drummond said: "A primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists."

The company said its investigation into the attack found two accounts of its online mail service - Gmail - appeared to have been accessed.

However, the attack was limited to accessing account information such as the date the account was created and subject line, rather than e-mail content, it said.

It said it had also discovered that the accounts of dozens of US, China and Europe-based Gmail users, who are "advocates of human rights in China", appeared to have been "routinely accessed by third parties".

It said these accounts had not been accessed through any security breach at Google, but "most likely via phishing scams or malware placed on users' computers".

At least 20 other large companies from a wide range of businesses were similarly targeted, it added.

Google's decision to concede to China's demands on censorship in 2006 led to accusations it had betrayed its company motto - "don't be evil" - but Google argued it would be more damaging for civil liberties if it pulled out of China entirely.

Nearly 340 million Chinese people now online, compared with 10 million only a decade ago.

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.

In US trade on Wednesday Baidu's shares were up 13%, and Google's down 0.57%.