The fact is, Google is not struggling because the Great Firewall or because the government makes competition hard. Google is struggling on their own regards and only by themselves. They seem not to be able to justify their existence in China and doesn't seem to offer Chinese citizens what they want.
Hmm, it only takes one paragraph to tell that you're talking out of your ass. Have you ever tried to use any Google service from China? Do you have the faintest idea how long does it take to load one page of search results, or how often does the Wall reset all connections to Google from your IP for one full minute, for some censorship filter was triggered by the most ordinary and unoffensive search terms? And these things are not exactly good for business.
"An idealist is one who, on noticing that a rose smells better than a cabbage, concludes that it will also make better soup." - H.L. Mencken