Google Reminds Us What It’s Really Selling: Us
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By Hailey Eber,
The Fiscal Times
February 1, 2012

In 2009, Datamation, a long-running website that covers information technology, published a published a prescient piece with the headline “Google’s Business Model: YOU Are the Product.” The post was about the then new Google Latitude, a rival service to Foursquare that allows users to share their locations with friends. Columnist Mike Elgan praised Google’s latest, then asked a rhetorical question: “Why does Google invest so heavily in great products, then just give them away?”

His answer was that Latitude and other Google services weren’t the tech giant’s real products – the people who use them are. And Google’s customer? The advertisers who pay Google billions to get access to its users, of course. “Over time,” Elgan wrote, “Google will likely combine all it knows about you from your Google searches, Google Calendar appointments, purchases via Google Product Search, interests on Google Reader, and conversations in Gmail and Talk – along with your location – and constantly offer you eCoupons, special deals and advice about nearby products and services.”

Sound familiar? It should. Last week, Google announced sweeping changes to its privacy policy, saying that starting March 1 it would begin tracking user data across its various services, from Gmail to Google Docs to Search and so on. (Users who don’t wish to have their data tracked across services can’t opt out. They can, however, choose not to login to Google when using certain services, like Search, that don’t require it, in order to limit the personal data being collected.)

Outrage quickly followed. Much of it was ostensibly about those who feel their privacy is being wrongly violated, but reactions were tinged with a strange sense of personal betrayal and disillusionment as commentators wondered yet again if the company was contradicting its own “Don’t be evil” motto.

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Google has long espoused the dreamy, impossible notion that both those who use its services and those who advertise to them can be well-served by the same beast, and this latest move, while not quite evil, is a disturbing reminder to many users that they’re not Google’s customers, they’re Google’s commodity. That’s a fact the company has done its best to obscure, not just from its users but from itself. Google’s company philosophy, quaintly titled “Ten things we know to be true” refers to both end consumers and advertisers as Google users.

Of course, the key difference between Google’s two sets of users is that one pays the company nothing, while the other is where the majority of Google’s revenue ($10.58 billion for the quarter that ended December 31, 2011) comes from. One pays for the privilege of using Google’s services with their ad-reading eyeballs and their personal information to better target said advertisements, the other pays in dollars. One is a product, the other is a genuine customer.

This would seem to be fairly obvious to anyone with a basic understanding of business, but it’s a fact the many users and pundits have seemingly conveniently forgotten, or in the very least confused. Ira Kalb, a professor of marketing at the Marshall School of Business at the University of Southern California, on Monday offered the search giant suggestions in a Business Insider piece titled “What Google Needs To Do To Calm Millions Of Angry Customers” – and he referred to the company’s “loyal base of customers (including so many of us).” Funny, last time I checked, Google advertisers weren’t angry, loyal, or so many of us. Rather they are companies like Epson printers. Google “served” me with one of their ads atop my Gmail inbox this morning, surely because some of my recent emails concern printing invitations and address labels.

Google has responded to criticism about its new privacy policy by focusing on the potential value these changes have to users. “There’s so much more that Google can do to help you by sharing more of your information with … well, you,” Alma Whitten, the company’s Director of Privacy, Product and Engineering, wrote on the official Google blog. “We can make search better — figuring out what you really mean when you type in Apple, Jaguar or Pink. We can provide more relevant ads too. For example, it’s January, but maybe you’re not a gym person, so fitness ads aren’t that useful to you.”

For certain users, Google’s consolidation will prove useful and helpful – some have indeed applauded Google for providing more transparency and simplicity with its new privacy policy – and besides, isn’t online privacy a silly, old-fashioned idea at this point anyway?

To many, it's not. The new policy has elicited a loud outcry from users, lawmakers and privacy watchdogs. It's clear that in trying to create more value for its advertisers, Google risks alienating those who use its services to a point that they go elsewhere – and take their valuable, ad-reading eyeballs with them. But how many users will really abandon Google – or Facebook or any of their favorite mobile apps, for that matter – because of privacy concerns? There’s a lot of chatter wishing Google would go back to being the good boy it once was, but comparatively little talk about ditching Google for, say, Bing or Apple mail.

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The bigger problem may be that, for many other users, the new Google will simply be more invasive than useful; “more relevant ads” really benefit advertisers and Google’s ability to sell ad space to them. But when Facebook, Twitter, and MySpace came together to protest another recent, controversial Google move – preferencing Google+ search results in social search – they did so by creating a browser extension that users could install to give them more relevant Google search results, calling attention to Google’s betrayal but not providing an alternative outside of it.

With their lives and information deeply entrenched in Google’s services, most users, it seems, aren’t quite ready to walk out the Google door. They don’t want a new love, they just want the Google they used to know.