The flowers left by free-speech advocates have gone; in their place has come disillusionment. “We came here because we believed that the internet could help open China up. But now we're effectively giving up,” says an employee at Google China – which last week threatened to quit the country in protest over a wave of cyber-attacks – who has started looking for a new job. “We are saying here's the global internet, and there's China, and that's two different things.”

To many internet industry executives, that is old news. “We have a very differently flavoured internet here,” says Calvin Chin, the Chinese-American founder and chief executive of Qifang, a student loan website in China. “Things ... are going to remain different and mature differently. So it's like different islands at Galapagos.”

Since China allowed the first internet connection to be established 16 years ago, global attention has been focused on how the web is changing the country. To those in the west who saw the web as an inherently open and free medium, it could only be a matter of time before the reactionary forces of censorship and authoritarian control succumbed to the inevitable.

At the forefront was Google, the world's richest media and internet company. Justifying their decision to bow to censorship four years ago, its executives argued that this was the first step towards a freer Chinese web, with their local search service one of the main forces helping break down barriers to the flow of information.

They were wrong. Instead, China has developed its own cyberspace. It is growing less like the internet in the rest of the world, not more like it. And it is not just the baleful presence of a vast, assertive and highly flexible censorship apparatus that accounts for this evolution: the formative forces of “.cn” also include cultural preferences and social structures that are very different from those of the west. Google itself has often struggled to adapt to these differences.

That makes the search company's fight with censors and threatened withdrawal pivotal in the development of the Chinese web. If Beijing calls Google's bluff and it leaves the country, it could hasten the online divergence between China and the rest of the world already taking place.

With 384m internet users, the country already accounts for more than one-fifth of the 1.73bn global internet population. For multinationals, that means adapt or lose a substantive market. Just like Google, many western internet companies have struggled to make that call.

Only after years of suffering in China did Yahoo decide to sell its operations there to Alibaba, China's leading e-commerce company, and take a stake in Alibaba in return. Yahoo China has since withered further, and the group has put the brakes on any future investments.

Alibaba triumphed in China over Ebay, the US-based company that is the world's largest online auction site, by building the world's largest online marketplace for trade among businesses. It is building Taobao, its consumer e-commerce site, into a similarly formidable force.

Google itself took years to find out that Baidu – its Chinese rival, which has more than 60 per cent of the domestic market in online search – offered a search box formatted in a way much better suited to Chinese characters than its own. The US company was also slow to tackle one of Baidu's main strengths in attracting user traffic: its free music download service. Only last year did Google launch an equivalent.