The more info the company accumulates, the more unwanted legal attention it will draw. What's more, its brand could suffer damage as well
Google's motto is "Don't be evil," but it might be better for the company if it were "Don't view evil." The search-engine giant's strategy to become the custodian of all electronic information may ultimately tarnish its financial future.
Storing information is very different from pointing to it. Google (GOOG) has already been involved in legal and government hassles over access to its search logs. The company's lawyers will square off with the Justice Dept. in a U.S. District Court hearing on Mar. 14 in San Jose. Calif., over the government's attempts to gain access to search requests and Web-site addresses. But all this is nothing compared to what's going to happen once Google becomes the one-stop database shop on the information superhighway.
The company's stated mission is "to organize the world's information and make it universally useful and accessible." And there's no doubt Google is data-ravenous. Unlike its predecessors in the search business, it didn't stop with tracking Internet sites. Through acquisition and product development, Google has expanded its search functions to include shopping information (Froogle), blogs, catalogs, 20 years of Internet Usenet chatter (Google Groups), academic papers (Google Scholar), and, ostensibly, all published hard copy (Google Books).
GOOGLE ALL OVER.
If the target were just public material, the only entity under threat would be the Library of Congress. But Google needs private information, too.
Google CEO Eric Schmidt pointed to the company's ambitions earlier this month when he inadvertently confirmed the existence of GDrive, a remote storage service, apparently designed to host the master version of everyone's personal data. GDrive was revealed on slide notes accidentally attached to a PowerPoint presentation posted on the Google Web site.
The company has also expanded its technology onto the personal computer with Google Desktop, which enables users to search through personal files. Schmidt & Co. have even gotten into communications with Google SMS (short messaging) and Google Mobile, maps with Google Maps, detailed satellite reconnaissance of the planet with Google Earth, and, of course, e-mail with the company's popular Gmail service.
The more Google wants to do, the more information it needs to store. And the more it has, the more valuable that data becomes -- and the more third parties will try to get their hands on Google's assets.
Another drawback to the spotlight: The more successful Google is, the more unwelcome legal attention it will draw. As data continues to flood into Google, the comprehensiveness of its databases makes it a juicier target for government fishing expeditions. Its refusal to comply with a Justice Dept. subpoena is getting a lot of media attention right now, but surely there are many situations where Google has complied with U.S. government requests. In fact, I imagine it has given in to most of them. Remember, Google's defense in the Justice Dept. case isn't based on consumer privacy, but rather on its right to protect trade secrets.
So I would imagine that Google is a favorite stopping point on the Patriot Act express. A federal agent investigating almost anything could easily justify dipping into Google's records, assuming the agent ever felt the need to justify anything.
Sometimes, just the results of searches can be damning. In one recent case, Google search evidence was used to secure a criminal conviction. In November, 2005, Robert Petrick was convicted of murder in Durham, N.C., in part because of evidence that he used Google to search for the terms "neck snap break." Although the police got the evidence directly from his hard drive, the authorities could have gotten it straight from the company.
In addition to criminal activity, Google's records would be useful in many civil cases, such as divorce, employment suits, and shareholder actions. As time goes on, Google's records will be as useful to an investigation as that of any other utility -- if not more so.
Even in the unlikely event that the lawyers leave it alone, Google is rapidly becoming the crown jewel of the Internet for hackers. The sheer volume of information makes robbing it as difficult as stealing bullion from Fort Knox, but if enough money is at stake, an aspiring Goldfinger will find a way.
I don't know what it costs Google to comply with each government request, but the real damage isn't financial -- it comes in the form of brand erosion. The "oo" at the heart of Google is you. The company doesn't produce a product -- it sells the opinions of the Internet community. Its search approach is based on the concept that for a given search term, the most-linked site is probably the most relevant. These pointers aren't put there by Google. They come from everyone.
Users don't need to understand how it works any more than they do a television set. They just need to believe that the answer is relevant, and miraculously, it usually is. And because people trusted the company, they were more than willing to use Gmail and Google Desktop.
So Google's business model is heavily dependent on trust. Without it, it will have trouble with more than just cranky privacy advocates. Look at Gmail. The revenue comes from targeted ads. The personalization is accomplished by software that reads and analyzes each e-mail and serves up a pitch tailored to its content. If consumers' suspicion of the company grows, it could tank the service.
Future Google offerings will undoubtedly incorporate personalization, which requires further trust -- trust that personal information is safe with Google, trust that searches are anonymous, trust that the company truly does no evil.
It's easy to see why Google is fighting the Justice Dept. subpoena. It might even win -- which would have wide ramifications well beyond the company itself. But regardless of how this case turns out, there will be others. The more Google collects and centralizes data, the more others will want it. The more compliant the company is with investigative requests, the more damage to its brand.
Google could ride through some revenue loss, but the end result could be something much worse: The culture the company espouses, and that employees love, could go away. Then it might experience one of the worst fates that can befall an innovative Silicon Valley company -- it will cease to have fun.