The shocking aspect of this story isn't that it happened. The Chinese have been actively hacking into Pentagon and defense networks for some time and recently have been prying into the F-35 Joint Strike Fighter program. Add in a couple of spy scandals and one would think the Chinese just don't like us.
Now, of course, we're no babe in the woods. Our intelligence agencies are doing the exact same thing. And if they're not, they're fired. Again.
The interesting aspect is Google's response. Is the "Death Star" turning a new leaf? Is Google pausing in its quest for world domination? Depends on if you believe the search company or not.The current China operation isn't that large and according to Google pulling out won't significantly impact its bottom line, meaning it can find that amount in its couch. So Google may be doing this because it's the right thing to do. Maybe Google saw the tarring Yahoo! (YHOO - Get Report) received for previously caving to the thugs in Beijing and their penchant to censor free speech. If you don't believe Google, perhaps this could be one way to close a business arm that isn't working while looking like a hero -- the business Jedi Mind Trick. The one thing we do know is that Baidu (BIDU - Get Report) stands to profit from a Google retreat, at least temporarily. If anyone thinks Google is going to ditch its long-term plans to own China (along with the rest of the world), I have some Lucent stock to sell you.