Guarding Google's Data Banks

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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.

PERSONAL PITCH.

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.

NO FUN.

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.

David Holtzman, the former CTO of Network Solutions, is the author of the upcoming book, Privacy Lost, to be published in September, 2006. Holtzman, who holds Google stock, blogs at www.globalpov.com.