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By its own admission, Google's announcement today was an "incredibly hard" decision and comes at a time when most other international companies are seeking partnerships to enter the burgeoning Asian market.

However, since its launch four years ago, Google continues to have lower margins and higher costs in China and, unlike other markets in which it dominates, the internet giant holds just  15% share of the country's search market.

If Google were to exit China it would have a negative impact on the the country's online advertising opportunities, according to Craig Mytton, head of search at media agency MediaCom.

Mytton said: "It will be unfortunate for paid-for advertising if Google ends its relationship with China as it's always good to have a second supplier in the market. While it's a big deal and will have a hit on Google, it's not catastrophic."

Jamie Gavin, senior analyst at ComScore, believes even if Google resolves its dispute with the Chinese authorities, it will find it difficult to gain traction against the country's established market leader , which has strong Government support and holds 71% of market share.

Gavin said such support for Baidu has even manifested itself in the past in restrictions being placed on Google.

He said: "If the situation remains the same, Google will continue to chip away at Badiu's dominance as it has done in previous years, but at a relatively slow rate.

"It will be interesting to see how the search giant acts in China now - whether it pulls out completely or attempts to shake loose from these sanctions - the latter may well be the only way for Google to win the search battle in China."

Alex Hoye, chief executive of digital marketing agency Latitude, said the likelihood of the Chinese government making a public U-turn was slim, making Google's presence in the country extremely precarious.

Hoye said: "I don't believe that this is just a negotiating position, Google must be fully prepared to pull out completely before they would make such comments in public.

"It will be difficult for the Chinese government to backtrack on policies."

He said resourceful residents in China may still find a way of accessing Google services even if the compay is forced to withdraw. The "Great Firewall of China" is constantly having to develop ways of combating new tools used to circumvent censorship, he said.

The only way Google can continue to operate in China will be for the Government to lift its restrictions, said Rob Pierre, managing director of search engine marketing company Jellyfish.

Pierre said: "You can't really be a successful search engine if the results are heavily censored."

ComScore November 2009