It might seem like commercial madness for one of the world's best-known consumer brands willingly to risk ejection from the most populous country.

Yet Google's decision to confront Chinese authorities over censorship reflects a realistic view about its limited business prospects in the country in the short term, and could actually have spin-off benefits elsewhere in the world, according to analysts and other observers.

The longer-term consequences for its business could, however, be less palatable.

“The cards were stacked too heavily against them,” said Gene Munster, an internet analyst at Piper Jaffrey. Even before its announcement in January that it would abandon self-censorship on its local Chinese search service, Google had endured a series of outspoken attacks from officials over allegations that it failed to protect local users from pornography.

The message was not lost back at Google's headquarters in California: the Chinese authorities had no intention of allowing the company to assume the sort of market dominance it enjoys in many other countries around the world, and preferred to keep the home-grown Baidu as the local search leader.

“I'm not sure they had a choice – it seems they chose to leave China because it was becoming untenable to keep working there,” said David Rogers, executive director of Columbia University's Center on Global Brand Leadership. “If they didn't leave this year, it would have been next year, as they saw more momentum going to Baidu and more corporate espionage.”

With China's internet advertising market pegged at about $1bn, and Google's revenues from the country estimated by most analysts at $250m-$300m, the risk of departure has little immediate impact on a company with revenues last year of more than $23bn.

By 2014, though, the Chinese market could well have grown to $15bn-$20bn a year, and Google could have expected – before this week's announcement – to earn $5bn-$6bn of that, according to Marianne Wolk, an analyst at Susquehanna Financial Group.

The extent to which it still has a realistic shot at keeping a significant long-term position in the country is likely to become clearer in the coming days as the Chinese authorities react to its gambit to push its search service beyond the reach of the censors.

Even if China does not take any more swingeing action against the company, Google's previous experience of running a search service from outside the country's “Great Firewall” is not encouraging.

Between 2002 and 2006 its share of the Chinese search business slumped from 24 per cent to 13 per cent as it faced sporadic blocks and even saw some of its traffic diverted to Baidu. Market share estimates suggest it has rebounded to 20 per cent or more since it installed its servers on the mainland to power the Google.cn service, but faces a repeat of its earlier experience. Other parts of Google's business in China also look set to take a hit. Around a dozen other internet companies distribute its search results and advertising, but some of these have been pulling back. Yesterday, Tom Online, a local portal company, said it would drop Google, while Ten Cent, a popular games and communication service, ended its ties with the US company last year in order to launch its own search engine.

Outside China, on the other hand, the company could see valuable benefits to taking a stand against censorship, according to some observers, though these are hard to quantify.

Submitting to self-censorship in China was a turning point for the company's reputation in 2006, and the first time it's “Don't be evil” motto was subjected to sceptical critique. Taking a stand now could help to burnish some of the idealism traditionally attached to its brand and reinforce the goodwill of advertisers and users. One senior advertising group executive said the move was unlikely to make any measurable difference to advertisers outside China.

The stand against censorship could have a more meaningful impact on its relations with government agencies. “It will help their image in the eyes of regulators,” added Mr Rogers. “It could be significant, especially as they come under more regulatory scrutiny in the years to come.”