Google Inc. will stop censoring its search results in China and may pull out of the country completely after discovering that computer hackers had tricked human-rights activists into exposing their e-mail accounts to outsiders.
The change of heart announced Tuesday heralds a major shift for the Internet's search leader, which has repeatedly said it will obey Chinese laws requiring some politically and socially sensitive issues to be blocked from search results available in other countries. The acquiescence had outraged free-speech advocates and even some shareholders, who argued Google's cooperation with China violated the company's "don't be evil" motto.
The criticism had started to sway Google co-founder Sergey Brin, who openly expressed his misgivings about the company's presence in China.
But the tipping point didn't come until Google recently uncovered hacking attacks launched from within China. The apparent goals: breaking into the computers of at least 20 major U.S. companies and gathering personal information about dozens of human rights activists trying to shine a light on China's alleged abuses.
Google spokesman Matt Furman declined to say whether the company suspects the Chinese government may have had a hand in the attacks.
Secretary of State Hillary Rodham Clinton said the Google allegations "raise very serious concerns and questions" and the U.S. is seeking an explanation from the Chinese government.
Google officials also plan to talk to the Chinese government to determine if there is a way the company can still provide unfiltered search results in the country. If an agreement can't be worked out, Google is prepared to leave China four years after creating a search engine bearing China's Web suffix, ".cn" to put itself in a better position to profit from the world's most populous country.
"The decision to review our business operations in China has been incredibly hard, and we know that it will have potentially far-reaching consequences," David Drummond, Google's top lawyer, wrote in a Tuesday blog posting.
A spokesman for the Chinese consulate in San Francisco had no immediate comment.
Abandoning China wouldn't put a big dent in Google's earnings, although it could crimp the company's growth as the country's Internet usage continues to rise. China's Internet audience already has soared from 10 million to nearly 340 million in the past decade.
Google, based in Mountain View, said its Chinese operations account for an "immaterial" amount of its roughly $22 billion in annual revenue. J.P. Morgan analyst Imran Khan had been expecting Google's China revenue to total about $600 million this year.
Although Google's search engine is the most popular worldwide, it's a distant second in China, where the homegrown Baidu.com processes more than 60 percent of all requests.
Free-speech and human rights groups are hoping Google's about-face will spur more companies to take a similar stand.
"Google has taken a bold and difficult step for Internet freedom in support of fundamental human rights," said Leslie Harris, president of the Center for Democracy & Technology, a civil-liberties group in Washington. "No company should be forced to operate under government threat to its core values or to the rights and safety of its users."
It's "an incredibly significant move," said Danny O'Brien, international outreach coordinator at the Electronic Frontier Foundation, an Internet rights group in San Francisco. "This changes the game because the question won't be 'How can we work in China?' but 'How can we create services that Chinese people can use, from outside of China?"'
Many Web sites based outside China, including Google's YouTube video site, are regularly blocked by the country's government.
Google's new stance on China was triggered by what it described as a sophisticated computer attack orchestrated from within the country. Rep. Anna Eshoo, D-Calif., praised Google for disclosing chicanery that "raises serious national security concerns."
Without providing details, Google said it and at least 20 other major companies from the Internet, financial services, technology, media and chemical industries were targeted. The heist lifted some of Google's intellectual property but didn't get any information about the users of its services, the company said. Google has passed along what it knows so far to U.S. authorities and other affected companies.
It does not appear that any U.S. government agencies or Web sites were affected by the attack, according to two U.S. administration officials. The officials spoke on condition of anonymity because they were not authorized to speak publicly about the issue.
The assault on Google appeared primarily aimed at breaking into the company's e-mail service, "Gmail," in an attempt to pry into the accounts of human right activists protesting the Chinese government's policies.
Only two e-mail accounts were infiltrated in these attacks, Google said, and the intruders were only able to see subject lines and the dates that the individual accounts were created. None of the content written within the body of the e-mails leaked out, Google said.
As part of its investigation into that incident, Google stumbled onto another scam that was more successful. Google said dozens of activists fighting the Chinese government's policies fell prey to ruses commonly known as "phishing" or malware. The victims live in the United States, Europe and China, Google said.
Phishing involves malicious e-mails urging the recipients to open an attachment or visit a link that they're conned into believing comes from a friend or legitimate company. Clicking on a phishing link of installs malware - malicious software - on to computers.
Once it's installed on a computer, malware can be used as a surveillance tool that can obtain passwords and unlock e-mail accounts.
Google's unfettered search results won't necessarily ensure more information will be made available to the average person in China because the government could still use its own filtering tools, said Clothilde Le Coz, Washington director for Reporters Without Borders, a media watchdog group.
"The Chinese government is one of the most efficient in terms of censoring the Web," she said. The blocking technology has proven so effective that it's become known as the "Great Firewall of China."
This program aired on January 13, 2010. The audio for this program is not available.