Update: Microsoft revamps blogging policy

Microsoft believes it is better to provide the technology to countries such as China than to withhold it, Smith said. "Internet isolationism is not an option," he said.

U.S. high-tech companies have been grappling with the need to do business in one of the world's fastest growing economies and deal with the ethical issues surrounding aspects of Chinese law. Companies have gone on the defense, saying that they must comply with the host country's laws if they want to do business.

One view is that companies will have to do this kind of occasional censoring, but it is outweighed by the long-term subversive effect of blogs, said Jonathan Zittrain, co-founder of the Berkman Center for Internet and Society at Harvard Law School.

"Another view is Western companies chartered in societies that believe in this kind of censorship shouldn't be carrying water for societies that do," Zittrain said.

Google Inc. was planning to launch a new search service in China this week that censors some results considered inappropriate by the government. The service, however, will tell users some results have been blocked because of their politically sensitive nature.

Observers have called for stronger ethical guidelines to help navigate the murky issues of training people who will use their new IT skills to restrict speech or access to information. Eventually, it may be in the vendors' best interests if they want to maintain allegiance from their users, said Rebecca MacKinnon, a fellow at the Berkman Center.

"Nobody is one asking Western companies to go and lobby the Chinese government to change its behavior," MacKinnon said. "That's not possible. But what we are asking companies to do is change the way in which they respond to Chinese government behavior and the way in which they interact with it, and that they can control."