Is Google's Threat to Pull Out of China a Good Move?

While it seems the "Don't Be Evil" search engine giant may return to the roots of its motto after years of being criticized for different policies in China -- such as self-censoring Internet search results in China that excluded politically sensitive topics -- and elsewhere, shareholders cannot be to happy about the possibility of foregoing one of the more lucrative and still growing markets in the world. Shares opened more than 2% lower Wednesday morning.

Meanwhile, shares of rival Baidu.com (BIDU) soared more than 10% in early morning trading on the possibility it would have the Chinese market pretty much to itself.

Of course, this could all be just posturing on behalf of Google in an attempt to get concessions from the Chinese government. While U.S. Secretary of State Hillary Clinton called on Beijing Tuesday to explain cyber attacks originating from China against Google and at least 20 other firms, it is unlikely Google will win any concessions. Other governments may join the U.S.'s scorn, but with China's promising large and growing market, it is likely nothing other than words will be exchanged as China knows its own lure to companies around the world, including Google.

While Google will not suffer immediate serious revenue impact, its future growth could be greatly affected if it pulls out of China. Especially if it is the only one to do so with no backing on the subject from other companies and governments. For now, at least, it seems the search giant is serious in its intentions.

Another question is whether Google's move is actually beneficial or detrimental to Chinese citizens as it limits their Internet exposure further. From media reports it seems that while many on the mainland respect Google's considerations to leave, they would also like it to stay. No doubt, shareholders agree.