Google privacy policy gets public airing - Financial Times

People using Google's email service, Gmail, on a relatively new BlackBerry smartphone may have noticed recently that some contacts now have small photos next to their names. They may have been surprised to see them there – after all, these are not photos taken by the BlackBerry itself, and its manufacturer Research In Motion has struck no data-sharing deal with Google.

Those images appear because Google has taken a profile photo users uploaded to Google+, its social network, and incorporated it into their contacts' Gmail address book.

This is just one example of how Google is increasingly combining the information it holds about its users from its dozens of products, which range from a search engine and maps to Android smartphones, flight checkers and language translation apps.

One line in Google's privacy policy, which came into force on Thursday, explains how it is able to do this: "If other users already have your email or other information that identifies you, we may show them your publicly visible Google Profile information, such as your name and photo."

But when, in late January, Google published this new document detailing how it is combining the personal information it holds about its users from its dozens of different products, many privacy advocates, data protection officials and state regulators let their simmering distrust of the internet company boil over. "Google didn't ask us if we, their customers, minded our data being merged and used in new ways," said Jim Killock, executive director of the Open Rights Group, a digital activist. "Most people will have no choice but to put up with the change. That is wrong."

Already worrying about the amount of information Google holds on large numbers of people and the way it was using it, this simple, clear explanation of how Google wants to "combine" what it knows about individuals to sell more "tailored" advertising and services was easy to attack. Some have even suggested it is illegal under European law, although Google denies this.

All-out data war begins between two giants

Google's de-siloing of the personal data held within its email, phone, and social services is the latest battle in what is becoming an all-out data war between the search engine and Facebook, writes April Dembosky.

While Google is several years, and billions of dollars, ahead of Facebook with its search-based advertising, Facebook has an altogether different set of data about its users that it is showcasing to woo more and more advertisers to the social network.

With a global map of how every one of its 845m users is related, and increasing information about their personal interests, entered freely by users every time they Like a photo or Share a song, Facebook is building a data arsenal that takes ad targeting to a whole new level.

"Facebook wimonetiseize a web-wide ad network, but one that is 'Like' based, where ads are based on preferences," said Bo Brustkern, the managing director of Arcstone Partners, an investment research firm. "We believe it will be the next engine of the digital age."

Last year, Facebook took the number one spot in the online display advertising market, surpassing Yahoo!, and this year is expected to remain at the top with a 16.8 per cent share of the overall US market, according to research from eMarketer.

However, the research firm predicts that several of Google's new ad products will push the search engine ahead of Facebook by next year. It estimates that 1 in every 10 dollars spent in the overall US advertising market will go to Google.

Just as Google moves into Facebook's territory by expanding its privacy policies to gain greater insight into its users' behaviour, Facebook is expected to tread into Google's domain: search.

"It would be a different kind of search," says David Sacks, chief executive of Yammer, which builds social networks for businesses. "Instead of ranking pages by how often they're linked to [as Google does], they'd be ranked by how often they're Liked."

Googlers have emphasised in the last few weeks that the clarity of this statement of intent is exactly why it represents an improvement on the previous situation. Before the March 1 change, there were more than 60 different privacy policies.

As Alma Whitten, Google's Director of privacy, product and engineering, wrote this week: "There's no longer any need to be your own mini search engine if you want to work out what's going on."

The new 2,300-word policy will take most people less than 10 minutes to read, but its most controversial point was summarised in Google's original blogpost on the matter: "We'll treat you as a single user across all our products, which will mean a simpler, more intuitive Google experience."

As well as improving its products, this data pooling is also likely to boost the value of Google's advertising. In particular, under the new policy, personal information can be taken from and used in Google's two most valuable ad properties – search and YouTube – which were previously cordoned off from other stores of personal information.

Privately, many Googlers see the fuss around its new privacy policy as "tearing off the Band Aid" – they realised it was going to hurt but see it as necessary pain to go through.

That Google failed to mention explicitly in its original blogpost announcing the changes these new uses of YouTube or "search history" data may not have helped its case among the privacy lobby. Most people, however, are unlikely even to have read that blogpost and dismissed the multitude of yellow warning boxes which The California-based Google has, in recent weeks, tried to warn as many users as possible about the changes, placing yellow banners across its sites.

However, many users will have ignored these, preferring not to know how their web services are made, just as most drivers are unable to fix their car engines.

Well-understood or not, personal data are the engine of the new internet economy. The traditional model of matching advertising to the content it appears alongside is rapidly giving way to a new digital world which matches ads to the reader or viewer. As people browse the web, cookies – small pieces of software installed on PCs which act as a unique identifier – allow websites to track what they are looking at and store that information in their own systems, gradually building a picture of their interests and demographic.

Advertisers and their agencies used to have to figure out for themselves whether particular media channels matched the consumers they wanted to reach. Now, they can simply fill in an online form for Google, and its algorithm will figure out the most appropriate place to show their ads.

At the same time, the explosion of blogs and social networks have created billions of web pages with little to no inherent value to big brand advertisers, who like to show their ads in a pleasant context such as the pages of a glossy magazine or in between touchdowns at the Super Bowl.

This has presented a challenge for many internet companies, but Google has something they lack: a large trove of data about individuals who have logged in to Gmail, Google+, Android smartphones or Picasa photos.

However, today, the vast majority of Google's ads fall more into the old model than the new. Search-engine marketing has been successful because the ads shown to people when they Google a topic can be easily matched to what they are looking for. That has been less easy on YouTube or blogs, where the intentions of the consumer have been less obvious and so marketers less willing to pay for advertising on them.

This week's new privacy policy opens the door for Google to combine all its information about users to allow the ads to follow the user, rather than the site, which digital marketers say will improve targeting and reduce wastage – and boost Google's prices.

"Google has always collected data on consumers, age, sex, location, sites they have visited, videos they have watched and so on," says Marco Bertozzi, managing director for Europe, Middle East and Africa at Vivaki Nerve Centre, the digital unit of Publicis Groupe.

"Google have simply dropped the walls that allow them to share your data with yourself and target better ads and services. From a commercial perspective, of course, it will help them."

Most marketers see nothing sinister in this as the data are anonymous. But as Google itself has admitted, some misconceptions have emerged.

Google is not merging every single one of its pools of data. Only information from services to which people log in to Google will be cross-fertilised. Data which Google gathers as people browse across the web to sites it does not own – even if they are logged in – will not be melded with search history, YouTube or Gmail records. And although it has not ruled out changing its privacy policy again, it does provide some assurances: "We will not reduce your rights under this Privacy Policy without your explicit consent."

The search firm has also pointed out that Viviane Reding, the EU Justice Commissioner who has this week voiced her concerns that the new policy is not in accordance with European law, has herself been confused about its practices. Ms Reding on Thursday told BBC radio that Google "utilises the data of private persons in order to hand it over to third parties" – a point Google has strenuously denied. Its advertising system works by marketers telling it what they are looking for, and Google matching that behind the scenes without showing its data to advertisers directly.

Google's challenge is to convince its non-technical users that these distinctions are meaningful – especially when many suspect its real objective is aiming not for improving its services but at sharpening its competitive edge. "This is about the fact that Facebook owns a massive space on the internet and Google doesn't," said Gus Hosein of Privacy International. "Google is trying to create a space by bringing together all its properties. But it is leaving the consumer in the dirt."

In the end, Google is betting that its users enjoy the improvements to its huge range of free services – from a search engine indexing billions of web pages and free smartphone software to seeing their friends' pictures appear on their BlackBerry – enough to tolerate the ever-growing exploitation of their personal information.

Additional reporting by Maija Palmer