• Contrast with Microsoft. Google perceives itself as the antithesis of Microsoft -- which has often been dubbed the evil empire. Google was setting itself up to be as influential and powerful as Microsoft but wanted to achieve that status in a way that was morally superior to Microsoft's.
• Attracting employees. Google sought and still seeks to attract people with exceptionally strong quantitative skills. Many of these people are recruited out of top schools. In addition to the possibility of achieving immense wealth through a rising stock price, many of these recruits are attracted by the notion that their wealth can be made without harming anyone.
• Youthful idealism. Google's co-founders have youthful idealism and the world-beating self-confidence that comes from hailing from one of the world's best computer science PhD program. Such youthful idealism enables the creation of entirely new business strategies. But it also creates the illusion that the ability to create new realities means that Google can succeed without being sullied by mundane business considerations that might affect lesser companies.

It is stimulating to those who enjoy watching the self-proclaimed morally superior stumble that Google has chosen to compromise its moral high ground in order to do business in China. And it reflects what is probably an internal division among the decision-makers at Google that Brin came out in public to disclose his qualms about Google's China strategy. The reality is that Google's co-founders must conduct the same cost/benefit analysis that any executive would face in choosing whether and how to compete in China. In my view, here are the benefits and costs for Google of its China strategy:

BENEFITS

• Access to a huge market.  China has 1.3 billion people, a growing fraction of which has Internet access. And with its economy growing at 10% a year, the potential advertising revenue in China represents an enormous business opportunity for Google.
• Opportunity to change Chinese culture. Google's idealistic co-founders probably hoped that if Google could get established in China, it could eventually influence the Chinese government's attitude towards censorship. While there may be a slim chance that this hope is realistic, it may be naive to assume that a foreign company can alter the values of any nation -- particularly one with China's rich tradition and threats of unrest.

COSTS

• Angry customers. Chinese Internet users are frustrated because the Chinese government is blocking access to certain web sites which previously worked. While Chinese customers probably realize that Google is not making the decisions to block these sites, the angry customers may decide to use other search tools. This could cost Google advertising revenues.
• Bad public relations. Google has gotten plenty of bad press over its willingness to censor access to the parts of the Web that China wants to block. Moreover, this bad press is troubling to Google executives and to its employees. Ultimately, Google will need to decide whether the lost profit of changing its China strategy is worth the positive press it might get if it sacraficed profit for principle.

My guess us that Brin's moral qualms will not lead Google to withdraw from the Chinese market. Nor will China change its policies towards censorship of the Web. Google won't change its principles. But it will act in a way that is inconsistent with those principles in order to satisfy stockholders' needs for profit growth. It remains to be seen whether this will cost Google in its efforts to recruit top people. Ultimately the key to recruiting will be the rising stock price.

If Google's stock stops rising, all its moral superiority will be of little avail. I don't think investors should worry about a change in Google's China strategy.

DISCLOSURE: I am neither long nor short shares of Google or Microsoft. For more about me, click here.