An article in the Financial Times reports on Google's confused response to China blocking its Chinese search engine. The article claims that ".. Google is struggling to understand what is going on." That's an interesting story, but the article goes on to list criticism of Google in a rather confused way.
FT quotes several observers in China to the effect that Google bit off more than it could chew in confronting Beijing. A "founder of a social networking services website" says that “Google has met its match in the Chinese government.” One competitor is quoted as saying that "Google’s move smacks of hubris."
The article goes on to quote "a US security expert" as saying that Google shouldn't have linked the censorship and cyber attack issues. The source complains that "we may not like the fact that China censors, but they are not going to discuss that with us," and "if we want to fight hacking, we need to talk about hacking and hacking only.” This sounds like an opinion from the US State Department, and makes perfect sense from that point of view.
The confusion arises from not considering Google's history on this matter. It has been widely reported that Sergey Brin, a co-founder of Google who was born in the Soviet Union, was initially opposed to Google's entry to the Chinese market because of objections to censorship. We also hear that this argument wasn't enough to carry the day back in 2006, and that Mr Brin went along with the move under the premise that Google could provide more information to Chinese users, and that was better than less information. (That sounds like a rationalization papering over conviction to me. I recognize that sort of thinking from the compromises I made working in the corporate world.) Finally, Mr Brin is quoted as saying that the cyber attacks were ".. the straw that broke the camel's back." (You can google all of this, so I won't provide references. The last one appears in the referenced article however.)
Mulling that over, and reading the article in the WSJ about the decision making around Google's policy change toward China, it's clear that the attacks gave Mr. Brin and others within Google the leverage to change a policy they were unhappy with for many reasons, but importantly, on moral grounds.
So that was the link between the censorship and cyber attack issues. From a US foreign policy perspective the linkage is not helpful, and not only for the reasons stated in the FT article. The consequences of Google pushing an issue that Beijing isn't going to listen to may include losing their Chinese business, but the decision is unlikely to lead to war. Governments must be more circumspect.
From a business perspective, the decision is puzzling because it cuts against Google's long term business interests. Business analysts and investment advisers just don't buy the story that Google did this to uphold the principle of an unfettered Internet. They are free to buy whatever they want, in a rational self interested way no doubt, but they are wrong. And pardon me, but the "hubris" criticism smacks of ingratiating Chinese authorities. The slam comes from a company that, along with practically every other business from nominally free countries, fully intends to cooperate in painting black ink over Internet sites that annoy an authoritarian Chinese regime. There's also the fact that short term, this move isn't going to have much of an impact on Google's bottom line, the China business wasn't yielding a lot of profit.
Summing up, I think Google isn't confused about China. They may be foolish for putting principle first, but they have my admiration for the decision.