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Google's policies are not concordant with Chinese policy, nor is google willing to subjugate itself to Chinese policy.

Oh really?

Google has a presence in China, and they have been very tight-lipped about what the conditions of that presence are. But as long as they're there and the Chinese government aren't blocking access to them, you can safely assume that they're playing ball to some extent.

Microsoft has yet to realize that software is now a commodity item. $600++ for the OS and Office is far over priced if they want to remain at the top. The price should be like a book, say $50 like they sell it in China. (less for illegal copies).

Google is already in the worlds biggest emerging market and presumably making a profit. http://www.google.cn/

Microsoft is jealous but it isn't going to change the fact that to compute you do not need Microsoft.

But imagine if Google came up with that killer app to cluster the whole worlds computer network which is best run on Linux. Or perhaps turn their CPU power into automated remote support for software updates to Linux and charge $19 per year for the service or perhaps free if Google put a single ad banner on the screen. And a user could select from the finest open source to install and run. If their system was stolen they could restore data and setting with their Google account. Now that would turn Microsoft on its end.

Google has it right, it is about servicing the customers needs for a profit and not DRM butt kissing, perpetual bug fixing, insatiable patching, often crashing and expensive. So unless Google side steps, Microsoft might as well save their dollars.

Anyone ever looked at google.cn? It doesn't looks like it follows the usual google style. Mabye someone is trying to beat google out in china.