Is Google turning EVIL?

The search engine's original slogan was "don't be evil". With a growing list of indiscretions and corporate heavy-handedness, has Google lost its halo? Kelsey Munro reports.

IT'S THE two-man start-up that in a few short years became a global colossus: the brand that became a verb. Like no other entity in the past 12 years, Google has transformed the world. Today it effectively owns the web through its dominance in online search and advertising.

But the first signs of disenchantment are emerging in the world's love affair with Google, as the fun young upstart has grown into a corporate monolith sucking start-ups, consumers' personal data and competitors' market share into its vast orbit.

"The popular perception of Google as a friendly, harmless service is beginning to crack," says Adam Bunn, the head of search engine optimisation at Greenlight, a UK consultancy. "The past year has seen it rile opposition from governments, writers, publishers and book sellers over Google Books, newspapers over Google News and privacy advocates."

As in politics, power breeds dissent. New competitors are greeting Google's expansion into their territories with hostility. The European Union has begun to push back against Google's dominance, demanding privacy restrictions on the Street View service in Germany and Greece.

An anti-trust complaint was recently lodged with the European Commission; and an Italian court convicted Google executives of invasion of privacy over a user-posted video.

In Australia and Britain, Google has raised hackles by funnelling revenue through its Irish subsidiary to minimise corporate tax. In the US, a class action lawsuit by authors and copyright holders saw the company modify its Google Books service; while smaller competitors have launched anti-trust suits, cheered on by Microsoft. And like others whose business models are directly threatened by Google, Rupert Murdoch is muscling up for a fight.

Like the human chain of residents that blocked a Google Street View camera van from photographing their village in England last year, not everyone thinks Google and its mission to "organise the world's information" is benign, useful, or even all that cute any more.

Number two on Google's famous "10 things" list, "It's best to do one thing really, really well", is looking like a distant memory. Some are wondering if number six, "You can make money without doing evil", is following it into history, a relic of a more innocent age of '90s web utopianism.

To some, resistance from older companies, the public or regulators to Google's relentless expansion is something like a culture war.

"Google is a very young company and the staff are a very young demographic," says analyst Dr Steve Hodgkinson, of Ovum Australia. "They've grown up in the web 2.0 world, they're not looking at these things [business, privacy, copyright] in the same way that a bunch of . . . older public servants would. They're genuinely coming from a different paradigm."

Dr Roger Clarke, the chairman of the Australian Privacy Foundation, puts it another way: "They have computer scientists who think they're the smartest people in the world and everyone will love it like they do. It's not how the world works."

Google's public image is now split between the believers those who "drink the Kool-Aid", in the words of a couple of industry insiders and those who are scared of the corporation's overwhelming market dominance and the potential for it to abuse its power. On the one hand, it is viewed as a legitimate market leader that has earned its success through open competition and innovation, because it offers users all kinds of great free services and because its core product Google search is the best there is.

On the other hand, as it has become indispensable to any business with an online presence, as it extends its commercial interests across different industries and collects ever more data on its users, Google is making some people very nervous.

Arguably, Google set itself up for a fall. You can't build a company with a founding tenet of doing no evil and aspire to world domination without encountering some fairly sharp contradictions along the way.

"Google has grown so fast and people fear a company becoming so dominant in the market," says Professor Jim Macnamara from UTS. "I can tell you they're scared in Seattle, at Microsoft."

The fear is widespread, says one Sydney web development professional, who did not want to be named because they do business with Google. "If you're not listed in Google, you're f---ed. But they keep changing the ground rules."

Google regularly updates its secret search algorithm, which can dramatically affect a site's ranking, but maintains its searches aren't rigged and sponsored links are clearly marked. (The EU anti-trust complaint alleges that Google has tweaked the algorithm to the detriment of small search competitors.)

That's not a concern for Jen McCormack, of Melbourne, who says she earns a six-figure income with Google's AdSense on her website, newagestore.com. "I have a passion that Google helped me turn into a healthy business. I definitely don't think them being big is detrimental, it's actually beneficial [to my business]."

Despite an employee culture that's been the envy of all beanbags and massages, the free in-house cafeteria, "20 per cent time" to work on pet projects a growing number of web wonks believe Google has taken Microsoft's crown as the evil empire, seeing it as a multinational that has deliberately built a global business that's hard to compete with, hoovering up small competitors and new technology.

Of course, there's nothing technically wrong with that, points out Jennifer Wilson director of the Project Factory, a Sydney and UK-based multi-platform development company.

"It is what business strives to do all the time, but [it looks different] if you are in a very strong, almost unassailable position in a market."

In what sounded a little like sour grapes, last week Microsoft chief executive Steve Ballmer put Google's dominance down to incumbency, to getting there first, rather than its culture. Others put Google's recent success down to acquisitions.

"Arguably their growth has been driven more by buying other companies than anything else," Bunn says. "If you look at any of Google's major products, including the all-important AdWords and AdSense, they are usually either fully or in part based on a product Google acquired by buying a start-up."

THINGS began to sour last year with Google Books, an example of the blithe unilateralism that some argue increasingly characterises the company's approach.

"They have since adjusted their strategy; but with Google Books they just started copying books, they didn't ask authors," Macnamara says. "It was only when they were legally challenged that they finally came to the negotiating table, and entered into an agreement with authors and copyright holders."

Privacy is another area of concern for non-believers. The company hasn't always helped that. In December, founder and chief executive Eric Schmidt told CNBC: "If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place . . . The reality is that search engines including Google do retain this information for some time."

In this light, the company's data collection begins to look more sinister.

Gmail users may not know that they have signed up to let the company's software read their private emails in order to target advertising to them. Ads are matched to words in individual messages. "Is that abuse [of privacy] or did we agree to that?" says Wilson.

Technically, of course, users did. But Clarke argues that most don't know what they consented to. "People don't know what they're signing up for on FlyBuys let alone something as huge as Google. None of us are in a position to know what they're using [personal data] for," he says.

A Google Australia spokeswoman points out that no human ever reads the emails ads are targeted through an automatic software scan. "All information we gather is used in accordance with Google's privacy policy and helps Google improve your online experience," she says.

Christine Chen, a Google US spokeswoman, says the company recognises some people have concerns with Google's information practices, including keeping users' search histories for 18 months for a variety of purposes as well as improving search results.

"We're very clear as to what kind of data we're collecting and what we do with it, and we give people control over data that may be sensitive," she says. "Dashboard is an example of that."

Google Dashboard is a widget that allows clued-in users to control their data and privacy settings for each of their Google products. Similarly, Google's AdPreferences setting allows people to opt out of receiving targeted ads (they will still receive random ads). Yet most users prefer targeted ads, she says. Many users view Google's collection of their personal info as a trade-off for the benefit of their free products.

Increasingly concerns with Google centre on the question of whether the company is now in a monopoly position, and could turn "evil". The company may not always retain its founders' best intentions.

"That's what the regulators worry about," says Hodgkinson. "They can't rely on a future where everyone is well intended . . . Companies like Google are really motivated by shareholder return."

Even those nervous about Google's power use it. Many need it. Most are united in admiration for its product innovation. It's the indispensable "frenemy".

"It's a very interesting relationship," Wilson says. "People might hate Google but we need them because they're making such big strides in areas we need to go."

GOBBLING UP THE WORLD

IN AUSTRALIA, nine out of every 10 internet searches are on Google, and the company's annual revenue is estimated to be at least $700 million and growing fast.

Google has about 90 per cent of the search market in Britain, Germany, France and Italy. It is the second biggest in Russia and China. In the US, it has about 65 per cent of the market, followed by Yahoo and distantly trailed by Microsoft's Bing.

Harnessing its online advertising business $6.5 billion in net income in 2009 Google has rapidly branched out into email, mobile phones, mapping, social networking, location-based apps and other services.

Through a dizzying rate of acquisition and product development, it has bought and assimilated scores of tech start-ups and big brands including AOL, YouTube, and DoubleClick, turning their technology into Google products.

It is getting into infrastructure, rolling out a fast broadband network in the US. It is investing heavily in e-health record systems.

The next phase of the web is likely to be driven by cloud computing services and "recommendation engines" instead of search engines, and Google, too, will be at the forefront.

1998 Google rents a Silicon Valley garage

1999 Moves to office space

2000 Becomes the world's largest search engine

2001 Google in 26 languages

2002 Google News launched

2003 Blogger.com acquired

2004 Gmail launched

2005 Google Maps launched

2006 Google in China and YouTube acquired

2007 Street View for Maps launched in the US

2008 Street View is available in Australia

2009 Translated in 41 languages