According to the WSJ, Google will soon launch a new Chinese search service in which it will censor results to avoid offending the Chinese government. Although this decision apparently created much angst within the company and will no doubt trigger howls of outrage from certain followers, it's the right decision for Google, its shareholders, and, ultimately, Chinese Internet users.
With China projected to soon become the largest Internet market in the world, Google simply has to be there (especially if it wants to index all the world's information). And if it is to be there, it has to do business the way the Chinese government wants it to do business, regardless of how offensive some of the restrictions may be. Although individual expression in China still has miles to go before becoming anything like free speech (at least with regard to criticism of the government), it's much better than it used to be. If the Internet continues to proliferate and the economy stays strong, moreover, it will continue to improve.
The Chinese Internet industry, meanwhile, will grow with or without Google, so the company doesn't have the luxury of being able to sit around and wait until the Chinese government relaxes its censorship to a point that Google senior management deems acceptable. In this case--as with Yahoo, Microsoft, and others--agreeing to work with the Chinese government does not mean supporting all of its policies, and doesn't make Google "evil." So hats off to Sergey and Larry for making a tough, mature, and pragmatic decision.