Google stirs up privacy hornet's nest

With no opt-out option, Google plans to combine users' data across services

Google has whipped up a privacy brouhaha with a blog post announcing that the company is rewriting its privacy policy, consolidating user information across its services.

What has the blogosphere and some users in an uproar is that Google isn't offering users an opt-out option. If you don't want your information from Gmail, YouTube and Google searches combined into one personal data store that can paint a detailed picture of you, the only option is to stop using Google's services.

There doesn't seem to be a way to keep using Google's highly popular products and services and not have the company combine all your personal data. And that bothers some users.

However, a Google spokesman noted that the company has been combining users' information from different services for a while. For instance, if a user begins to type a name into the Calendar app, the name will auto-complete with contacts from the user's Gmail account.

With the upcoming changes, the company is expanding that effort and combining users' information across all products and services, the spokesman said.

Some users are leery of the changes. And in a nonscientific Washington Post survey of 13,541 Washington Post readers, 66% said they would cancel their Google accounts because of the changes, 15% said they wouldn't quit Google and 19% said they haven't decided how to respond.

"People are upset for two reasons. The first is that Google is just now making this new use of data explicit, and the second is that there is no way to opt out and still use any Google service," said Dan Olds, an analyst with The Gabriel Consulting Group. "It's not that Google is collecting more information. It's that they're combining information from all of their various products and services and using it to laser-target ads at users. I think that some users and privacy advocates are looking at this as a slippery slope."

This latest uproar comes on the heels of another public relations pitfall. Google this month integrated information from Google+, its new social network, into its search results, prompting competitors, like Twitter and Facebook, to fire back that the company is acting out of bounds.

Alma Whitten, Google's director of privacy for product and engineering, said in a blog post that the changes are expected to go into effect March 1.

"Despite trimming our policies in 2010, we still have more than 70 (yes, you read right...70) privacy documents covering all of our different products. This approach is somewhat complicated," Whitten wrote. "So we're rolling out a new main privacy policy that covers the majority of our products and explains what information we collect, and how we use it, in a much more readable way."

She added that Google is consolidating more than 60 of its privacy policies into one encompassing policy.

These moves may have privacy advocates in an uproar, but they shouldn't come as a surprise to anyone who follows Google, noted several analysts.

"I think it's potentially a quite serious [privacy issue] given the fact that the policy describes Google's intent to coordinate information gathered across its large array of products, such as search, YouTube and Gmail," said Brad Shimmin, an analyst with Current Analysis. "This is a natural evolution of their business model, of course ... Sadly, the level of detail Google has amassed on its users should come as no surprise, given Google's business model for search and advertising, both of which aim to provide relevancy."

By amassing as much user information as possible, Google is strengthening its position in its competition for advertising dollars with Facebook.

"Assuming that this goes forward, and I think it probably will, at least for a while, there's a good chance that it will give Google a leg up on Facebook and other competitors," said Olds. "Targeted ads are much more effective than random ads, sometimes with orders of magnitude better response rates. That's gold for advertisers, and they'll pay much more to ensure that their messages appear on the screens of people who are much more likely to be in the market for their product."

Google's ability to combine data from users' searches and Gmail use allows the company to build a better understanding of what ads users would be interested in seeing.

However, the Google spokesman said that if a user has not logged in to his Google account, through Gmail or Picasa for example, the company has no way to recognize him and can't associate the searches with his identity. That's not new. That's how it's always worked, he said.

Rob Enderle, an analyst with the Enderle Group, said for a company with Google's size and experience, he's surprised that executives didn't do a better job making this privacy announcement.

"They are aggregating a lot of data, which suggests they'll know more about you than any close friend, relative, or spouse will shortly," he said. "This does raise one of Google's critical weaknesses, however, and that is its inability to present changes in a favorable light. By disclosing as they did, they clearly scared folks half to death and they likely could have avoided some of this pain had they thought through the disclosure approach a bit more."

Copyright © 2012 IDG Communications, Inc.

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