Posted September 4, 2009 9:59 am by with 1 comment

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The man that gave Google one of its biggest legal headaches, is leaving the company.

According to the WSJ, Kai-Fu Lee, president of Google’s China operations is leaving Google to work on his own start-up. You may remember that Lee, was smack in the middle of a legal battle between Microsoft and Google over allegations that he breached his employment contract, when he took on the job of helping Google with its efforts in China.

The two companies settled in 2005, and since then Lee helped Google build its Chinese search share to 20%–measly compared to Baidu’s 76% dominance–but still a big improvement for the company.

Of course, Google’s moving quickly to ensure Lee’s departure is not too much of a setback. Lee shoes will be filled by two people–those must have been big boots!–and Google will double the size of its sales force in China.

It will be interesting to see what Lee will do next and if he’ll come clean about his reasons for leaving. I suspect that frustration played a key role in his decision. Google has faced many uphill challenges in China–mostly due to the company’s US roots. If Lee decides to base his start-up in China–and work closely with the Chinese government–he might find less of a hard road to hoe.