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August 10, 2006

Google Says Company Protects Against Accidental Data Disclosure

Google's CEO Eric Schmidt said yesterday at the Search Engines Strategies conference that Google has systems in place that prevent a data breach similar to the one that recently occurred at AOL.  Google owns a 5% stake in AOL so the comments were straightforward but not critical.  Schmidt said that the greater threat was from governments, not just the U.S. government, seeking access to the oodles of data Google and other search companies amass.

Google forced the issue to some extent earlier this year when it resisted the government's request to supply search data as part of the defense of COPA.  A federal judge did grant the request but in a substantially lesser form than the government had wanted.  Google was widely praised in standing up to the Justice Department over the case.  AOL, Microsoft, and Yahoo sheepishly caved in before Google said no. 

Google is concerned about privacy because the company's success hinges on the trust its users place in the company.  Many services offered by the company--from email, shopping, entertainment, and others--require users to provide detailed personal information about themselves that is easily correlated to their online activities.  It's not very different from customers of the other major online services but there is the perception that Google values customer privacy more so than the others.  The company even argued that point in the hearing over the COPA data.  This is another reason why the company generates so much traffic aside from the quality of their product. 

Look at Microsoft.  That company is heavily criticized for its aggressive business practices and the insecurity of Windows.  Whether Windows Live can actually compete with Google on quality is one matter, but there is all the baggage associated with Microsoft as Microsoft in that offering. 

Yahoo affiliates itself with AT&T (formerly SBC) for DSL services.  AT&T is a company that is embroiled in a lawsuit for surreptitiously giving away customer data to the government, and who has rewritten its privacy policy to convert customer data into company assets to avoid liability in the future.  To be fair, Yahoo has an independent privacy policy for its own services that are not tied to AT&T.  Still, in the aggregate, some customers must worry about how the affiliation affects their privacy.

AOL is trying hard to reform its image as a stodgy Internet provider.  It took the company a long time to get out of its walled-garden mentality to online access.  AOL is a little more imaginative these days by dropping subscription fees for broadband users and offering free online storage space (5 gigs!) to attract customers and the accompanying advertising revenue.  The recent data gaffe has got to be minimized as a one time thing or it will hurt those efforts bigtime.

The worst Google has done is cooperate with the Chinese government on censorship.  But all three major U.S. players in the Chinese market got hammered on that one.  It's not always how good your product is, but that combined with how the public perceives it.  If anything, Google has run circles around the competition in that category.   

Stories about Eric Schmidt's comments are in CNET, the Washington Post, and the San Jose Mercury News

Update:  You can read a nice summary of the session at the Search Engine Rountable page here.

August 10, 2006 | Permalink

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