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Is it 'High Noon' for Google, China?

By Kevin Voigt, CNN
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China-Google battle heats up
  • China insists it does not limit Internet freedom
  • Google CEO says Google is committed to staying in China
  • Clinton says Google's allegations of hacking raise serious concerns

Hong Kong, China (CNN) -- Now that the big guns have waded into the public standoff between Google and China, who will be the next to blink?

On Thursday, U.S. Secretary of State Hilary Clinton made a pointed speech on Internet freedom, while Chinese press have labeled the American search engine "White House's Google."

The tit-for-tat continued Friday, with China's Ministry of Foreign Affairs posting a statement slamming Clinton's speech as an inflammatory statement "that goes against truth and damages U.S.-Sino relations."

Speaking to reporters on a conference call Thursday, Google CEO Eric Schmidt said "in a reasonably short timeframe now, we will be making some changes" in China.

The public standoff between Google and China -- over censorship rules, the hacking of Chinese dissidents' Gmail accounts and related cyberattacks on dozens of other U.S. companies -- has been unprecedented.

"The fact that multiple very large corporations indicated they had all been victims of this ... and many issued public statements and took a stand, that's not something we've seen before," said Eugene Spafford, a computer security specialist at Purdue University who has advised two U.S. presidents and numerous companies and government agencies.

"The most likely possibility is that Google will actually leave China and lose a few hundred million in revenue," says Haim Mendelson, a professor of electronic business at Stanford Graduate School of Business. "From Google's perspective, it better aligns what they say and what they do."

Another possibility, Mendelson believes, would be a compromise where Google would no longer be required to self-censor search items on the Web -- but Chinese censors could still block controversial topic searches such as those on Tibet dissidents or the outlawed Falun Gong spiritual group through routers and local Internet service providers.

"But I can't imagine there will be a compromise because of the impression that it will be yielding to pressure from Google, which is a sign of weakness," Mendelson said.

Both Google and the Chinese government appeared to take steps Thursday to ratchet down the rhetoric in the dispute.

"Our business in China is today unchanged. We continue to follow their laws. We continue to offer censored results," Schmidt said. "We've made a strong statement that we wish to remain in China."

"The Google case should not be linked with relations between the two governments and countries; otherwise, it's an over-interpretation," said He Yafei, China's vice foreign minister, at a press conference on Thursday.

Questions over the origins of the cyber attack -- and whether it was directed by the Chinese government -- are the most troubling of the case, Spafford said.

"Are they private citizens acting out of patriotism? Is it government operated? Or government tolerated?" Spafford said. "From Google's point of view, it could be argued the Chinese government isn't reining in their criminal element very well, even if they are living by the rules (in operating in China)."