official blog, Google detailed the story of why this has all happened. In a nutshell, they detected attacks on their servers in China and investigated. Server attacks are, of course, nothing out of the ordinary for large websites, but apparently this attack was different.
Google was able to learn that the attacks were targeted at human rights activists within China. Their blog post goes into far greater detail, and I encourage you to read it.
Suffice it to say that this seems to be the last straw in what was an already tense situation. In order to operate within China, Google, of course, has to sensor their search results (you can see this yourself by viewing image results for "Tiananmen" on Google.cn and Google.com).
So with all this recent attack drama, Google has said that they are seriously evaluating their role in China and "...we are no longer willing to continue censoring our results..."
As Google openly acknowledges on their blog, their unwillingness to censor will very likely result in shutting down Google.cn and closing their offices there. This isn't a major loss to China, as Google's market share there is less than 20%. But it brings the issue of censorship back into the public spotlight. Hillary Clinton has already weighed in on it and most of the major news networks have already reported on the story.
Hopefully, if nothing else, this sets a precedent and other companies follow suit. China certainly isn't going to stop censoring anytime soon. But Google has just enough clout and political presence in the United States that it could at least help to catalyze international pressure on the issue.
This is certainly a huge announcement and a major move on Google's part. We'll be hearing more about it in the coming weeks and months as the story unfolds.