Google China offices, Beijing

The Wall Street Journal says the attack targeted as many as 34 different companies or other entities, according to two people familiar with the investigation, which has been under way for weeks.

Investigators are probing whether the attack is linked to the Chinese government or intelligence services, one person familiar with the investigation said. The attack has piqued the interest of US intelligence agencies, including the National Security Agency, this person added.

The FT says today that US intelligence officials believe hackers supported by the Chinese government have been behind major breaches at US defence contractors, who have in some cases been targeted using the same previous unknown software vulnerabilities as trick emails sent to Chinese dissidents.

Google said that in mid-December it had identified a “highly sophisticated and targeted attack” on its corporate systems “originating in China.” It added that it had found evidence of similar attacks on “at least” 20 other companies in finance, the media and other sectors.

The FT says one person close to Google said that the company had no evidence that the cyber-attacks were sanctioned by the Chinese government. However, another person familiar with its thinking said that it would not have taken such a drastic measure had it not believed the attacks were had official backing.

The New York Times says the company has a much smaller share of the search market here than it does in other major markets, commanding only about one in three searches by Chinese. The leader in searches, Baidu, "is a Chinese-run company that enjoys a close relationship with the government."

Google China employs some 700 people, many of them highly paid software engineers, and has an estimated $300 million in annual revenue.

Rebecca MacKinnon, a fellow at the Open Space Institute and an expert on the Chinese Internet, told the Times that Google had endured repeated harassment in recent months and that by having operations in China it potentially risked the security of its users in China. She said many Chinese dissidents used Gmail because its servers are hosted overseas and that it offered extra encryption.

“Unless they turn themselves into a Chinese company, Google could not win,” she said. “The company has clearly put its foot down and said enough is enough.”

The withdrawal of such a high profile American company, would be an embarrassment for the Chinese government and longterm, would likely be a costly move for Google.

David Drummond, SVP, Corporate Development and Chief Legal Officer commented on the Google Blog:

Like many other well-known organizations, we face cyber attacks of varying degrees on a regular basis. In mid-December, we detected a highly sophisticated and targeted attack on our corporate infrastructure originating from China that resulted in the theft of intellectual property from Google. However, it soon became clear that what at first appeared to be solely a security incident--albeit a significant one--was something quite different.

First, this attack was not just on Google. As part of our investigation we have discovered that at least twenty other large companies from a wide range of businesses--including the Internet, finance, technology, media and chemical sectors--have been similarly targeted. We are currently in the process of notifying those companies, and we are also working with the relevant US authorities.

Second, we have evidence to suggest that a primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists. Based on our investigation to date we believe their attack did not achieve that objective. Only two Gmail accounts appear to have been accessed, and that activity was limited to account information (such as the date the account was created) and subject line, rather than the content of emails themselves.

Third, as part of this investigation but independent of the attack on Google, we have discovered that the accounts of dozens of US-, China- and Europe-based Gmail users who are advocates of human rights in China appear to have been routinely accessed by third parties. These accounts have not been accessed through any security breach at Google, but most likely via phishing scams or malware placed on the users' computers.

We have already used information gained from this attack to make infrastructure and architectural improvements that enhance security for Google and for our users. In terms of individual users, we would advise people to deploy reputable anti-virus and anti-spyware programs on their computers, to install patches for their operating systems and to update their web browsers. Always be cautious when clicking on links appearing in instant messages and emails, or when asked to share personal information like passwords online. You can read more here about our cyber-security recommendations. People wanting to learn more about these kinds of attacks can read this US government report (PDF), Nart Villeneuve's blog and this presentation on the GhostNet spying incident.

We have taken the unusual step of sharing information about these attacks with a broad audience not just because of the security and human rights implications of what we have unearthed, but also because this information goes to the heart of a much bigger global debate about freedom of speech. In the last two decades, China's economic reform programs and its citizens' entrepreneurial flair have lifted hundreds of millions of Chinese people out of poverty. Indeed, this great nation is at the heart of much economic progress and development in the world today.

We launched Google.cn in January 2006 in the belief that the benefits of increased access to information for people in China and a more open Internet outweighed our discomfort in agreeing to censor some results. At the time we made clear that "we will carefully monitor conditions in China, including new laws and other restrictions on our services. If we determine that we are unable to achieve the objectives outlined we will not hesitate to reconsider our approach to China."

These attacks and the surveillance they have uncovered--combined with the attempts over the past year to further limit free speech on the web--have led us to conclude that we should review the feasibility of our business operations in China. We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China.

The decision to review our business operations in China has been incredibly hard, and we know that it will have potentially far-reaching consequences. We want to make clear that this move was driven by our executives in the United States, without the knowledge or involvement of our employees in China who have worked incredibly hard to make Google.cn the success it is today. We are committed to working responsibly to resolve the very difficult issues raised.