Google's vulnerability exposed

London : The cyber-attacks that Google said had led it to rethink its position in China mark the first known case in which Google has seen its defences penetrated so comprehensively, forcing the world's biggest internet company on to the back foot in an attempt to limit the damage.

Google confirmed on Wednesday its security had failed to keep out attacks aimed at its main infrastructure, which had led both to the theft of some of the company's own intellectual property as well as details of two Gmail accounts.

These attacks were more serious than other infiltration attempts that were made by planting malicious software, also known as malware, on users' computers or by tricking them to gain access — the methods most commonly used by cybercriminals and spies.

Alma Whitten, a security engineer at Google who was involved in the company's investigation, said Google's systems had succumbed to direct attack that exposed the two different types of data, but added the company was confident it could tackle the problems.

"Security is always going to be an ongoing process," she said. "We have the resources at Google to have a very large security team with wide expertise — we can bring all of that to bear."

Her comments came as Google sought to minimise the fall-out from the affair. In terms of its business impact, China is "truly immaterial", a spokesperson for the company said.

But in its broader political ramifications and the internal soul-searching it has caused, Google's involvement in the country has been responsible for some of the hardest decisions the young company has faced.

Line in the sand

Late on Tuesday, Google finally drew a line in the sand. By declaring it will no longer censor results on Google.cn, the world's biggest internet company has set in train a confrontation with the Chinese authorities that could well lead to the closure of its local search service.

In a blog post explaining its move, Google said that "over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search service within the law, if at all." It added: "We recognise that this may well mean having to shut down Google.cn, and potentially our offices in China."

If so, it would mark a dramatic retreat over a point of principle that has long bedevilled the company.

Four years ago, its agreement to censor search results in return for being allowed to run a local service in China drew fierce criticism.

"Google has always been haunted by the spectre of Yahoo handing over material that helped put a Chinese dissident in prison," says Dan Brody, the first employee Google hired in China and now chief executive of Koolanoo Group, a China-focused internet company.

While causing internal angst, the Chinese compromise has not helped Google to gain the sort of position inside China that it enjoys in many markets.

By its own internal estimates its share of searches stands at only about 20 per cent, well behind Baidu, the market leader, though external measures suggest its share is above 30 per cent.

With online advertising in China lagging well behind development elsewhere, Google's China business probably only accounted for about $200 million (Dh734 million) of its annual revenue, said Sandeep Aggarwal, an analyst at Collins Stewart in the US. Google's revenue last year was about $17.5 billion.

Yet the long-term potential of the market has made this one of Google's biggest areas of investment. It has taken a series of setbacks to bring Google to this point. Last year it skirmished with Chinese authorities over claims that its local service was failing to crack down enough on pornography.

The final straw, according to Google itself, came with what it claimed had been "a sophisticated and targeted attack on our corporate infrastructure originating from China that resulted in theft of intellectual property from Google".

— Financial Times