Google said on Tuesday that their company and about twenty others were victims of a "highly sophisticated and targeted attack" that originated in China in mid-December.  The attack was apparently designed to gain access to the email accounts of Chinese human rights activists.

"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 these companies, and we are also working with the relevant U.S. authorities," said David Drummond, Senior Vice President/Corporate Development and Chief Legal Officer.

He continues, "…as part of this investigation but independent of the attack on Google, we have discovered that the accounts of dozens of U.S.-, 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."

Drummond then went on to explain the company's possible future stance on 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 and 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."

This will certainly be a development to keep an eye on in the coming days.  You can view Drummond's entire statement here.