Google - What Now?

My 2 cents :-)

1. China did not expect Google to do what it did. Forwarding Google.Cn to Google.hk
   
2. China's government will "suggest" to Google's partners within China, to find another partner. This will substantially reduce the revenue for Google within China.
3. China's Golden Wall will continue to censor individual Google pages from Google.hk that Google.cn as accessed from within China.
4. China's government is going to be very careful on dealing with Google and has not decided how to react yet, beyond the suggestions to partners and blocking individual page results.
5. China's government has lost face by how Google has thought outside the box.
6. China's government considers control of information of the Internet within China as key to continuing in power. They don't want an Orange or Green revolution to happen within China.
7. China's government is favoring Chinese companies over foreign companies. And government run companies over private Chinese companies.
8. Microsoft will not follow what Google has done.
9. Leaving China has helped Google's reputation worldwide.
10. In the long term leaving China as Google has done may actually help it.
    

References:

Google Faces Fallout as China Reacts to Site Shift - NY Times.
Google does the right thing in China -- will Microsoft follow? - Washington Post
Google or China: Who Has More to Lose? Room for Debate - NY Times.