Google has more to lose than China

On 12 January, the official Google blog posted a seemingly innocuous entry called “a new approach to China”. In it Google claimed that serious cyber-attacks in December resulted in the theft of their intellectual property. The post stated the attack was aimed at accessing the Gmail accounts of Chinese human rights activists. It also said the accounts of dozens of American, Chinese and European Gmail users who advocate human rights in China “appear to have been routinely accessed by third parties”. Then they dropped the bombshell. As a result of these attacks, Google decided to stop censoring results on Google.cn. “We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China,” concluded post author David Drummond, Google Senior Vice President, Corporate Development and Chief Legal Officer.

There is little doubt that Google made a business decision and dressed it up with noble values. The news was even kept secret from Google’s 700 Chinese staff until it was made publicly available. Techcrunch’s Sarah Lacy offered three reasons why Google made their decision. Lacy claims Google were not doing great business in China (with 30 percent of the market) and could never outdo local leader Baidu (with 63 percent). Secondly Google had already made their decision and the announcement was a “scorched earth” move aimed at buying Google goodwill in the west. Thirdly it is only going to get harder for western firms as cashed-up Chinese tech companies begin infiltrating the US market.

The official Chinese news agency Xinhua has been strangely diffident in its response. Normally it reacts bullishly to any perceived criticism of the Communist regime but an article on 13 January merely suggested China was seeking more information on Google’s stance. They quoted an anonymous high ranking official merely said "It is still hard to say whether Google will quit China or not. Nobody knows.” They also quoted Guo Ke, professor of mass communication at Shanghai International Studies University, who said it was "almost impossible" for Google to quit China and also impossible for the Chinese government to give up its management right over the Internet. "I think Google is just playing cat and mouse, and trying to use netizens' anger or disappointment as leverage,” Guo told Xinhua.

The official Chinese Government response is that companies must follow the law of the land. The Chinese Foreign Ministry said China welcomed foreign Internet companies but that those offering online services must do so “in accordance with the law.” According to the New York Times, another high-ranking official has called for even tighter Internet restrictions. Wang Chen, the information director for the State Council urged Internet companies to increase scrutiny of news or information that might threaten national stability and emphasized the importance of “guiding” online public opinion.

Subsequently Google has hinted it will negotiate with the Communist regime. It may be that Google needs China more than China needs Google. China has by far the world’s largest internet population with estimated 338 million Internet users - 46 million of those were added in the last 12 months alone. The entire network is policed by the Great Firewall of China and the government stepped up efforts to censor the Web during the Beijing Olympics and the Communist regime’s 60th anniversary last year. During the purge, the Chinese government made particular efforts to shut down social media sites such as blogs, online video sites, Facebook, Twitter and Youtube.

However, many Chinese users have sophisticated knowledge of the Internet and are able to circumvent the censorship. Locals call it “fanqiang”, or “scaling the wall.” Users connect to an overseas computer via a proxy server which costs $2 a month to share with about two dozen others. Chinese citizens engaged in such practices say the government rarely cracks down on them individually, preferring instead to go after prominent dissidents who publish information about forbidden topics online. Meanwhile non-profit companies have set up censorship-evading tools for users to download in a cat-and-mouse game with authorities.

But as The Hindu puts it, many Chinese online users will be let down by Google’s losing battle with the authorities over censorship issues. They quote Chinese Internet expert Kaiser Kuo, who believes the ordinary Chinese Internet user is being ignored. “But they are also questioning whether the moral point Google is trying to make is worth the price they have to pay,” he said. “The government no longer worries about access to outside information through Web 1.0 sites, but has closed down social media platforms such as Twitter, Facebook and YouTube that allow for the rapid dissemination of information.” The absence of Google will simply tighten the Government’s grip on power in this most closed of kingdoms.

France's war on Google hots up with new Internet advertising tax

The French Government has released a report that calls for a tax on online advertising revenue to fund subsidies for French culture. This would include subsidies for newspapers, art, music and other products struggling in the digital era. The media has dubbed it the “Google Tax” which is reasonable as the Silicon Valley search engine giant holds the dominant position for search in France. However, the report’s author says the plan would likely target other big players such as Microsoft and Yahoo (some English reports also say Facebook is included, but this is disputed by French media). (photo by mathias poujol rost)

The government commissioned the report into the wake of complaints from media companies that aggregators such as Google are getting a “free ride” on their content. The report called “creation and the Internet” was an outcome from Culture minister Frederic Mitterrand’s new baby called 'mission Zelnik'. The mission takes its name from Patrick Zelnik, CEO of independent music label Naïve, and other members include Jacques Toubon, former minister of culture and Guillaume Cerutti, CEO of Sotheby's France. While their report had 22 recommendations on such matters as increasing spending on digitising books, creating Internet portals to aggregate online content, cutting the tax for online cultural sales, and setting up bodies to ensure that artists are paid for work downloaded from the Web, it is the “Google Tax” that has hogged all the headlines.

Details are sketchy about how it will work but the idea is that France would place a tax of one or two percent on all online advertising revenue in order to raise 10 to 20 million euros. Silicon.fr (in French) wonders how online music sites would make the proposal work and says the Zelnik report proposes a move to collective management of music rights. It says the Society of Authors and Composers (SACEM) says the proposed solution only partially meets their requirements and says web2.0 services such as Youtube, Facebook and Myspace should also contribute to the scheme.

The idea has been rejected by the big internet firms. Critics say the tax would be difficult to implement and Google says it is not the right way forward as it could slow down innovation. Google claims their partnerships with publishers and content creators has distributed more than 4.2 billion euros worldwide last year. “The better way to support content creation is to find new business models that help consumers find great content and rewards artists and publishers for their work,” said Olivier Esper, senior policy manager for Google France.

The move is part of a growing French trend to shackle some of the more extreme elements of the Internet. In October France introduced legislation to cut Internet access from illegal downloaders. Under the law, a new agency will send out an e-mail warning to people found to be illegally downloading films or music. A written warning is sent for a second offense in six months and after a third offense, a judge can order a one-year Internet rights suspension or a fine. But while President Sarkozy was happy with the legislation, Reporters Without Borders called it "a serious blow to freedom of expression on the Internet."

Last month Sarkozy also took on Google over its plans to digitise the world's books. Portraying himself as a defender of French culture in the digital age, Sarkozy’s concern was that the project would “strip France of its heritage”. He has launched a counter-proposal for a French firm to scan the contents of the country’s libraries. Sarkozy’s call was echoed by Prime Minister Francois Fillon who said France would not accept another cultural industry being "threatened by looting."

It is easy to dismiss such tinkering like some do as French “cultural arrogance”. But France does have the right to take measures to ensure its vital and diverse culture is not reduced to an Anglophone add-on. Other countries are beginning to realise that the invisible hand of the US-dominated market does not necessarily lead to good outcomes and local culture is threatened by this as much as local economies. While Google’s ambitions are, in the main, admirable, France is right to hold up its hand and question its outcomes, if not its motives. If being digital means being democratic, then others should have a part to play in the brave new world, not to mention have access to Google’s enormous profits. If the levy puts an end to “enrichment without any limit or compensation”, it will be no bad thing.

When kleptomaniacs collide: Old media declares war on new media

The sheer onion-ness of President Obama’s Nobel win yesterday has deflected international attention from the fact that a conference of media Canutes had just declared war on the Interwebs. The announcement came at a three day “world media summit” between Western media elites and Communist cadres that Japanese Kyodo News dubbed “Beijing’s Media Olympics”. Among others, Associated Press’s CEO Tom Curley and News Corp boss Rupert Murdoch joined Chinese leader Hu Jintao on stage in the Great Hall of the People to denounce the people for the way they used media content. (photo of Internet pioneer Vinson Cerf by centralasian)

Today, that bastion of free media, the Chinese state press agency Xinhua, published the full text of the World Media Summit Joint Statement. The Forbidden City conference theme of “Cooperation, Action, Win-Win and Development” was a signal that management doublespeak lay ahead. Most of the sentences failed Bill Easterley’s not-test of summit outcomes. The not-test asks whether it is possible to negate it and create a sentence that a sane person would utter. Who, for instance, would NOT hope that “media organisations around the world will provide accurate, objective, impartial and fair coverage of the world's news events.” There was nothing in the bland communiqué that suggested war was on its way.

But many of the media leaders at the conference departed from the prepared script. The boss of AP passed Easterley’s not-test with flying colours by saying many sentences that sane people will disagree with. For Tom Curley the problem was nothing less than regaining control from “crowd-sourcing Web services” such as Wikipedia, YouTube and Facebook, search engines and blogs. They were all hurting his business model but he was not going to take it lying down. Curley said AP would “no longer tolerate the disconnect” between those who gather the news and those who “profit from it without supporting it."

78-year-old Rupert Murdoch was equally bellicose about the future. He described fellow conference invitee Google as “parasites” who make money off traditional media. He said the “philistine phase” of the digital age was almost over and “the aggregators and plagiarists” will soon be forced to pay for “the co-opting of our content." He saw the contest as a battle to the death between content creators “the people in this hall” and “content kleptomaniacs”.

But Murdoch needs to remember content kleptomania is a two-way sword. In August, his own Sky News weren’t initially keen to pay for using an eye-witness picture to a London police shooting a citizen journalist named Joe Neale had posted on Twitpic. It was not until Neale tweeted to the world “Newscorp use your photos without permission but have plans to charge for reading their content” that they came to the party and paid him £330.75.

New media won this particular battle but it will be harder to win the war. Murdoch biographer Michael Wolff said this week in Vanity Fair war is Murdoch’s natural state. The enemy is the Internet. When Wolff explained to Murdoch a news aggregator business he is involved with, the media mogul said “so you steal from me”. Wolff said Murdoch did not understand the Internet and his online investments were all failures (Delphi, iGuide, Myspace, Pagesix.com). Murdoch runs his business not on the basis of giving the consumer what he wants but through more old-fashioned methods of structural market domination. Wolff called him “a scold who can intimidate the market into doing what he wants it to do.”

Weston Kasova at Newsweek was unimpressed with the scolding Murdoch and Curley dished out at the Beijing conference. He called it “macho outrage” which was calculated to be quotable but is fake. Kasova said aggregators actually draw audiences towards traditional media sites and their advertisers. News Corp and AP could shut off this traffic with one small piece of code (User-agent: Googlebot. Disallow: /) but of course they don’t do it. “They'd rather blame someone else for their failure to compete in a changing marketplace,” says Kasova pointedly.

Link economy advocate Jeff Jarvis at Buzz Machine also condemned the “Proletariat of the Press”. He said the Beijing conference was a “suicidal attempt to protect outmoded models and fight the future”. Jarvis prefers a different template of the future based on “new efficiencies, specialization, targeting, [and] value that comes with the collaboration that the internet and its links enable.” It was the “irresponsible stewardship over journalism” that was killing newspapers not the Internet. “We are not kleptomaniacs,” said Jarvis. “We are the new (free) distribution.”

US media academic Robert McChesney puts the question more pointedly in a rare old media act of contrition from Le Monde Diplomatique. McChesney wondered when the debate took place which ratified large corporations as the guardians of American media. “When, exactly, did Americans approve of the idea that a handful of corporations selling advertising were the proper stewards of the media or that it was inappropriate to ever question their power?” he asked. “When had the American people ratified the corporate media system as the proper one for the United States?” The answer is, of course, “before the Internet arrived”.

Let the war commence.

Drowning not Waving

Google picked a bad week to launch a product called Wave. Low-lying Pacific Islands, many of whom are facing elimination as the sea level rises, are recovering from massive natural damage this week. A massive 8.0 magnitude earthquake struck just a few kilometres offshore of Samoa on Wednesday. Those that died stood little chance of surviving three metre waves that arrived onshore just a few minutes later. More than 150 people died in Samoa, at least 31 in American Samoa and nine more died in Tonga. (photo by snarglebarf).

Of course it is not Google’s fault any of this happened. Nor was it the fault of Saturday’s Sydney Morning Herald that they chose today to plug Samoa as a fancy-free tourist destination. Tourism is Samoa's largest industry, and one-quarter of the tourist accommodations had been destroyed. In fact the SMH may be helping the Samoan tourist board avoid a “second tsunami” as anecdotal reports arrive of mass cancellations. Google meanwhile is studiously avoiding the link between their name and the forces of nature. It prefers to issue sympathies to the lesser known but just as deadly Tropical Storm Ketsana (local name "Ondoy") which killed 300 people dead in Manila this week.

Their concern is admirable but Google’s Wave analogy needs a closer look. The name is based on surfing the web, but what if the Wave is too big? Will it wipe us out if we don’t catch it? Google is a massive company and we should no longer take their “don’t be evil” motto on face value. Its mission statement is to “organize the world's information and make it universally accessible and useful.” But Wave gives a lot of power to what is already a $22 billion company as it seeks information from every stream.

A few weeks ago Google launched Fast Flip showed a newspaper way of browsing Internet content. Google Wave also takes its purpose from older technologies. Wave asks the question what would email look like if it was invented today. It also combines elements from instant messaging, wikis and social networks with the ability to share documents, maps, images and video.

Google have launched their latest beta version of Wave by invite-only, initially limited to 100,000 people (note: this writer was not among the 100,000). While the artificial limit sounds gimmicky and goes against the way Google usually operates, it does have a point. Wave is intended as a fully open communication and collaboration platform but is not quite ready for prime time yet.

Google Wave has the potential to gather a staggering amount of data to bring to every conversation, so there needs to be a viable stress and volume test. There may also be performance issues. The initial 100,000 users are mostly tech savvy early adopters who will do much to challenge the scalability of the project. Google say this is just the beginning and will soon be inviting many more to try it out “if all goes well”.

The ramifications are enormous if it does work. Although email is now often seen as a somewhat dated technology, it works because of its ability to get a consistent message out to a mass audience quickly. Email is still the dominant business communication tool, a position it has held since the 1990s so there is big commercial incentive for Google to get it right. Google’s mail system still lags well behind Yahoo Mail and Hotmail though is increasing faster than either of its older rivals. Wave may also work wonders for personal usage of GMail.

Brisbane law professor and early adopter Peter Black gives Google Wave a tick of approval though he has reservations. Black missed out on a direct invite from Google but used his social network to get one. After 24 hours of testing, he says Wave is an “amazing tool”. Black likes the way it allows conversation to evolve (and re-play if necessary) and says it is intuitive. On the down side, it was difficult to get a true picture of its worth as Black had very people to collaborate with so far. He also says its level of difficulty may give it limited appeal and it could get “quite noisy” with emails, instant messages, SMSes, Twitter and Facebook updates all in the one space. Google will have to work hard to ensure the sound of its message doesn’t drown out the waving.

Google launches Fast Flip as first response to content pay plans

Google released Fast Flip to the world today to mixed reviews. Many reviewers saw it as a throwback to earlier ways of accessing information while others praised it for exactly the same reason. Silicon Republic said Google has initially partnered with three dozen major publishers, including the New York Times, the Atlantic, the Washington Post, Salon, Fast Company, ProPublica and Newsweek to provide content in fast-loading newspaper or magazine style. They saw it as a way of a good way of avoiding waiting for content rich sites to load when all users want to do is “skim through the paper”.

Meanwhile over at Online Journalism Blog, Paul Bradshaw calls it “an analogue-mindset concept” that will further weaken the news sites that serve it. Google will run ads alongside the Fast Flip articles and will give an undisclosed share of the profits to the news providers. But Bradshaw says that Fast Flip screen shots may be sufficient for a lot of users who will no longer click through to the sites. This may be particularly true when users are on the run - Joshua Gans says its sideways scrolling motion works better on the iPhone than on a computer.

Webware agreed with Bradshaw that it would take advertising away from publishers but called Fast Flip a “platypus of news readers”. The author said it was an intermediate online form which recreated the experience of reading microfiche. “Fast Flip is a good solution for putting a magazine or newspaper online, and it makes scanning even a more modern Web feed really fast,” he said. “But it still feels forced.”

Perhaps it has been forced upon Google in reaction to news paywall plans which are gathering pace. Google have been conspicuously silent on the plans of Murdoch and others but they are surely worth watching as a party with a strong vested interest in its outcome. Google does not rely directly on subscriber services – it makes its money on advertising. In 2008 Google had revenues of $21.8 billion of which $21.1 (97 percent) was advertising. That amounted to a profit of $4.2b which at 20 percent wasn’t bad for such recession year (it is improving again in 2009).

But Google’s founders know how quickly that could change if they don’t stay ahead of the game. In his book “Linked” Albert-Laszlo Barabasi talks about how he met Larry Page in March 2000 when few people had heard of the search engine. The pair were speakers at an Internet Archives workshop in San Francisco. The event attracted an eclectic mix to hear about digital trends. Page gave a short talk about the search engine and bought his audience with a box of T-Shirts that had Google’s tag written on them: “I’m Feeling Lucky”. Barabasi says he tried out his t-shirt when he got home and also tried the search engine. He, like many others after him, became quickly addicted to Google’s product.

According to Barabasi, whose specialty is networks, Google should not have had the success it had as it violated the prediction of scale-free networks. Older sites such as Yahoo and Alta Vista had the advantage of becoming hubs quicker. But Google’s fitness for purpose gave it a commercial advantage that exponentially outweighed the disadvantage of their relative youth. To users, he says Google is easily tens of thousands of times more useful than any one web page.

Google has been busy adding to its stable of products since its t-shirt days. It offers services across a key range of products include email, images, video, blogging, RSS, maps, documents, advertising and news aggregation. With Google News the search engine behemoth faced claims of parasitical activity by the news industry. Google’s response is that it does not sell adverts on Google News, it a the major source of traffic to news websites, and publishers don’t like it they can simply turn off the flow with simple HTML script.

Margaret Simons reiterated that last point in her welcome return to blogging at The Content Makers. She says Google hasn’t broken into news sites. “The newspaper companies have allowed it in – and indeed hung out a 'welcome' sign, and they have done so because it suits their purposes,” she said. “Google has built their site traffic.” They may now decide they want to be paid to access that content but it is also highly likely that companies such as Google will opt to pay for the right to index and link to the content. In other words, Google might choose to be part of the club, and thus bring us all in. One possible way of doing that might be by linking Google News to micropayment systems.

In his book “We the Media” journalist Dan Gillmor said he was a fan of Google News even though it generally doesn’t acknowledge news content from the sphere of grassroots journalism. Google News was the brainchild of Krishna Bharat who realised after 9/11 it would be useful to see news reporting from multiple sources on a given topic assembled in one place. Bharat told Gillmor Google News has one basic rule; news requires editors and Google News is displaying what editors think is important at any given moment. Bharat saw Google News as complementary to what newspapers do. While Gillmor acknowledges it wouldn’t exist without news reporting from elsewhere, he said in 2006 it could become the front page for the rest of us.

From a distance of three years hindsight, that hasn’t yet happened (though it is being increasingly wrapped into products such as iGoogle). But perhaps the announcement of the new product today may yet prove Gillmor right. Fast Flip is a more visual representation of Google News. It also seems to tap into the “tabbed browsing” zeitgeist and as Gans says, is likely to prove especially popular on cell phones. Fast Flip may indeed be a platypus, but it is likely that higher-order products won’t take long to evolve.

AP threatens web users who quote their articles

The world’s biggest newswire agency Associated Press said yesterday it would sue websites that use its members' articles without permission. Speaking at the company’s annual meeting in San Diego, California AP chairman Dean Singleton threatened to "pursue legal and legislative actions" against websites that do not properly license news content. He said AP would develop a system to track its online content (as well as the content of its 6,700 fee paying member newspapers) to determine whether it is being legally used. "We can no longer stand by and watch others walk off with our work under misguided legal theories," said Singleton. In a complementary press release Singleton riffed off Peter Finch’s character Howard Beale in Network “We are mad as hell, and we are not going to take it any more.”

In an interview with Paidcontent.org’s Staci Kramer, Singleton expanded on AP’s proposed new rules of engagement. He said the media industry had been “timid” about protecting content, in the good times and “didn’t recognise that misappropriation is as serious an issue as it is”. In these tougher times, Singleton said they must protect the rights of their content “We own the content but we’ve let those who spend very little, if any, get the most advantage from it,” he said.

Kramer said AP already had an aggressive reputation with lawsuits on aggregating content and intellectual-property protection “so the idea of suing isn’t new.” But despite Singleton’s threats, it is not yet clear who his targets might be. Google signed a deal three years ago with AP or the use of its stories and photographs. Google claimed it was for a product that complemented Google News not Google News itself (though to my knowledge no such product yet exists in the public domain). However this deal expires at the end of 2009 and AP may be putting in an ambit claim for future negotiations. But as TechDirt points out, Google News drives traffic to news providers' sites, where they're free to monetise that traffic however they see fit.

In any case, it will prove difficult under US fair trade laws to persuade news aggregation websites that they should pay for content they are currently getting for free. It is this “fair use” application that Singleton calls a “misguided legal theory”. AP already has form in this area. Last year, they announced what they called a “quotation licence” for bloggers and journalists for use of AP articles. The fees start at $12.50 for quotations of 5-25 words and rise to $100 for over 251 words. Boing Boing called it an attempt “to replace the established legal and social order with a system of private law”.

But given how impractical these conditions, perhaps what AP may really be after is a guarantee that their originating story appears first in a Google search about the content. AP’s director of strategic content, Jim Kennedy, gave an example of the problem to Forbes. "When the Red River in Fargo rises, we want to people to go to the Fargo Forum. But searching for the Red River on Google might also send you to the London Telegraph."

But Kennedy also acknowledged that AP should accept some responsibility for directing traffic to its member sites. He said they are developing software that improves tags and, also crucially, tracks content. This latter functionality will assist AP find out who is using their content that shouldn’t be. The main culprits are the search engines and blog sites who use (and link to) AP content on a regular basis. But as MediaMemo’s Peter Kafka says, stopping this traffic won’t do anything to solve the underlying problems affecting AP’s business. Kafka notes three basic issues 1) too much undifferentiated information 2) the disappearance of classified and local retail advertising and 3) debt-ridden investors who have paid too much for media assets in the last decade.

Roy Greenslade says Google and bloggers are not going to go away. He believes the news agencies need to find an accommodation with them “to ensure journalism survives”. Peter Kafka also points out the dangers of quoting Howard Beale: “You are aware [he] gets shot to death at the end of the movie, right?”

Google’s EPIC fail: privacy group wants cloud computing safeguards

A privacy group has requested the US Federal Trade Commission shut down Google mail, docs, Picasa and other services because they don’t adequately safeguard the confidential information that they obtain. The stunning request was made by the Electronic Privacy Information Center (EPIC) and outlines the risks of Google’s cloud computing services. The request is far from frivolous and could have profound consequences for the industry in general, and Google in particular.

EPIC, who describe themselves as “a public interest research organization”, have requested the FTC open an investigation to determine the adequacy of the privacy and security safeguards. They also want them to assess Google’s claims about the service. In a letter to the government regulatory body, EPIC suggest they “enjoin
Google from offering such services until safeguards are verifiably established.”

According to Wikipedia, Cloud computing is where dynamically scalable and often virtualised resources are provided as a service over the Internet. As that rather dense definition shows this is not a simple concept to grasp. The word “cloud” acts as a diagrammatic metaphor for a complex computer network. Thankfully then, users of the services don’t need to have knowledge of or control over the technology infrastructure "in the cloud" that supports them. The problem from a privacy perspective is that the data is held by third party servers, which is managed by private firms who provide remote access.

Google currently provides an extensive array of Cloud Computing Services. These include unlimited free email (“Gmail”), online document storage and editing ("Google Docs"), an integrated desktop and internet search ("Google Desktop"), an online photo storage ("Picasa Web Albums") and a scheduling program (“Google Calendar”). And the number of people who use these services is growing. As of September 2008, 26 million people use Gmail.

While Google are quick to advertise the security safety of their products, EPIC say there are several known flaws with their cloud computing service. They noted a bug found in 2005 where Internet Explorer exposed web surfers' hard-drive data to malicious web sites. And as recently as last week, the Wall Street Journal disclosed Google had shared “a very small number” (0.05 per cent) of online documents with users who weren’t authorised to see them. The bug hit users who changed their sharing settings on multiple presentations and documents at once, causing Google to make those documents available to others whom the owner had shared a document before. The Journal says the bug shows systems for managing file access permissions can break down, causing documents to end up in the wrong hands.

IT Security expert Greg Conti says Google is a particularly vulnerable target because of the amount of data it has. However Conti qualifies his remarks by saying the problem is endemic. ”It almost impossible for you, your employer, and online companies to provide impervious protection against attack”, he says “therefore, your data is at risk.”

Therefore EPIC backs up its case by pointing to Google’s false advertising. It quotes the Federal Trade Commission Act which regulates unfair and deceptive trade practices. The act allows for three factors that support a finding of unfairness. The practice must cause substantial injury, not be outweighed by countervailing benefits and the harm is not reasonably avoidable. EPIC says Google’s inadequate security policy fails all three tests. They say Google's advertising is deception likely to mislead customers. EPIC also quote several test cases which it believes give precedence to act against Google.

EPIC says the popularity of Cloud Computing Services means that data breaches pose a heightened risk of identity theft. It says the FTC should hold purveyors accountable, “particularly when service providers make repeated, unequivocal promises to consumers regarding information security.” They want FCC to open an investigation. They also want Google to revise its terms of service, make their information security policies more transparent, take Cloud Computing off the market until safeguards are established, and contribute $5 million to support research on privacy enhancing technologies (I presume it's five million as the document talks about a strange number called “$5,000,0000”). Google has not reviewed the complaint in detail but says “it has policies in place to ensure data is protected”.

Google weighs in on Microsoft-Yahoo bid

Google announced yesterday it finds Microsoft’s $45 billion bid for Yahoo “troubling” and also stated the move threatens the “openness and innovation” of the Internet. Senior Vice President David Drummond said the acquisition could allow Microsoft to extend unfair practices from browsers and operating systems into the Internet. He also question whether a Microsoft-Yahoo combination would take advantage of a software monopoly to unfairly limit free access to competitors' email, IM, and web-based services. “Policymakers around the world need to ask these questions,” he said. “And consumers deserve satisfying answers.”

CEO Steve Ballmer said that Microsoft had been talking with Yahoo for 18 months and called Yahoo co-founder and CEO Jerry Yang last week to make the proposal. In their statement to the market, Microsoft admitted Google was a major factor in the bid. Ballmer openly admitted that the market “is increasingly dominated by one player.” He believes that the merged entity could “offer a competitive choice while better fulfilling the needs of customers and partners”.

Nevertheless, Google has 65 per cent of the US search market and would still dwarf the combined entity which would account for between 25 and 35 per cent of the market. The $44.6 billion bid is a mixture of cash and stock, based on a total of $31 per share. The price is 62 percent greater than Yahoo's Thursday closing price of $19.18. Yahoo recently announced plans to lay off 1,000 workers and their 2008 earnings forecast has not caused great joy in Wall St. Nor is the market happy about Microsoft whose shares had their worst fall in 21 months falling over six per cent to $30.45 on Friday night. The merger is a risky move, as combining two companies that are losing market share offers no guarantees that the trend will be reversed.

In any case, the deal is a long way from consummation. Not only must Yahoo’s shareholders approve, US and European anti-trust regulators must also signoff. Getting Europe onside may prove difficult given the bad blood that exists between the European Commission and Microsoft following last year’s court battle that forced the software giant to comply with a landmark 2004 EU antitrust decision. The EU will need to weigh up issues relating to competition and privacy when making their decision. Following on from the anti-trust suit, the EU is likely to insist Yahoo's portal services should not be bundled up with Microsoft's Windows operating system on personal computers.

Despite its dominance in the PC domain, Microsoft’s move is based on their continuing failure to make a significant impression in the Internet. Blue chip Microsoft will be looking to tap in to Yahoo’s Silicon Valley undergraduate culture. Some analysts say the culture clash between Microsoft and Yahoo is not as big as it might seem. According to Charlene Li, an analyst at Forrester Research, the companies are surprisingly similar in outlook. ”Yahoo is not the sort of strapping startup it was 10 years ago,” she said. “It's a corporate organisation with its own bureaucracies.”

Writing in ReadWriteWeb, Marshall Kirkpatrick believes the acquisition will be positive from a cultural perspective. He focuses on the synergies that Yahoo will bring such as content and online innovation. He says the major threat Google poses to Microsoft is that they are shifting the software world online. To combat this, the merged entity would have to put more muscle into services such as Flickr and Del.icio.us and innovative content sites like Yahoo Sports and Finance. “All of that will be good for Microsoft,” he said. “And it will be good for those of us who find those sites and services inspiring.”

The size of the bid shows how many Internet companies have grown to be even larger than the traditional media players. Yahoo’s market capitalisation is larger than CBS’s. The dynamism of the newer media also leaves the older players for dead. The trend for acquisition has accelerated in the last five years. Since 2002 Google have bought 27 web services, Yahoo have bought 25 and Microsoft have bought 24. In 2006 alone Yahoo acquired Bix, an advertising/contest service, MyBlogLog, a blogging aggregation tool and Kenetworks, a cellphone service. A merged entity is not just a threat to Google; it will pose a serious threat to News Corporation, Disney, Time Warner and the other traditional telecommunications and media companies.

Googling Google

The latest edition of the Merriam-Webster Dictionary includes the word "google" which means to use the well-known search engine to look for information on the web. Google are victims of their own success and feared this might happen. They identified it as a risk in their file to the US Securities and Exchange Commission earlier this week which stated: “there is a risk that the word 'Google' could become so commonly used that it becomes synonymous with the word 'search'. If this happens, we could lose protection for this trademark, which could result in other people using the word 'Google' to refer to their own products, thus diminishing our brand.” They are the new Hoover.

It is the downside of being the largest search engine in the world. Google began as a research project in January, 1996 by Larry Page and Sergey Brin, two Ph.D. students at Stanford University. Page and Brin called their initial search engine "BackRub," named for its analysis of the of the web's "back links." The name google is a misspelling of googol which is a large number: 10 to the power of 100(a 1 followed by one-hundred zeros). the domain name google.com was registered on September 15, 1997.

Lawrence Edward "Larry" Page is 33 years old. He holds a Bachelor of Science degree in computer engineering from the University of Michigan with honours and a Masters degree from Stanford. Sergey Mikhailovich Brin is the same age as Page. He was born in Moscow, the son of a Jewish mathematician. His family suffered from anti-Semitism and emigrated to the US when Brin was six years old. He received his Bachelors of Science from the University of Maryland in May 1993 with high honours. He went to Stanford where he got his masters and met Larry Page. Sergey was assigned to show Larry around the university on a weekend tour. They did not immediately hit it off and argued incessantly. However, they soon found a common interest: retrieving relevant information from large data sets. Together, the pair authored a paper entitled "The Anatomy of a Large-Scale Hypertextual Web Search Engine." The paper is now one of the most accessed scientific papers at Stanford University.

Their thesis suggested that the pages with the most links to them from other highly relevant web pages must be the most relevant pages associated with the search. This laid the foundation for their search engine. In 1999 they moved to Palo Alto in Silicon Valley. Their search engine quickly attracted a loyal fan base. A particular attraction was the uncluttered layout. The screen offered a search page with few visual distractions. Behind the page lay Google’s competitive advantage, a unique search capability.

In 2000 Google began selling advertisements associated with the search keyword to produce enhanced search results for the user. This strategy was important for increasing advertising revenue, which is based upon the number of hits users make upon ads. This helped it survive the dotcom bubble when it burst in 2001. That same year Google hired Eric Schmidt to become Chairman and CEO. Schmidt was CEO at Novell for four years prior to joining Google. Schmidt has the legal responsibilities and also focuses on management of the vice presidents and the sales organization. Google is now officially a triumvirate of Page, Brin and Schmidt.

Google now has a market capitalization topping $128.3billion -- the 27th biggest among stocks traded in the United States.
Google shares are up 400% since it went public in 2004. The stock is powered by the belief on Wall Street that Google is changing all the rules in media advertising.

Google’s figures are staggering. It has 104 interface languages including Tagalog (Filipino) and Klingon (Trekkie). It has over 8 billion fully indexed web pages and is growing daily. Google is asked to search this data over 1,000 times every second of every day, and typically comes back with sub-second response rates. Google's PageRank algorithm was patented in 2001. It looks not just at the number of links to a page but at the quality or weight of those links, to help determine which page is most likely to be of use, and so which is presented at the top of the list when the search results are returned to the user.

Google have expanded well beyond their initial offering. Blogger.com was one of the earliest blogging tools started by Pyra Labs. Google bought it out in 2003. They bought Picasa in 2004 and integrated it with Blogger to allow users to post photos to their blogs. In the same year, they also introduced Gmail, a free webmail and POP e-mail service, known for its abundant storage and advanced interface. Gmail is still officially in beta release as is Google Calendar. Calendar is a contact and time management web application and is integrated with Gmail. It was released in April this year.

Google Earth is another is a free-of-charge, downloadable program. It is a virtual globe which maps the planet by pasting images obtained from satellite imagery, aerial photography and GIS over a 3D globe. This too was developed as third party software (Keyhole Inc – who were funded by the CIA.) which Google bought out in 2004. The degree of resolution differs from place to place but many cities are available in a resolution high enough to see individual buildings.

The key to all these applications (and Froogle the price engine website is another) is that they are all free to users. There are privacy downsides to this apparent consumer heaven. Gmail offers so much storage (1,000 megabytes) that users are encouraged never to delete anything. In the U.S., email messages lose their status as a protected communication after 180 days under the Electronic Communications Privacy Act. This means that a subpoena instead of a warrant is all that's needed to force Google to produce a copy. So far Google have defied the US Department of Justice request to hand over data about what people are looking for. The department wants the data to try to show in court it has the right approach in enforcing an online pornography law.

Concerns also remain over Keyhole’s links to the CIA. Google Watch have recommended users search using Scroogle which provides the same functions without the search results ending up on a massive Google database.

Google’s philosophy is “don’t do evil”. However the company has become so big, so quickly that it will find this mantra increasingly difficult to live with. It is the price to pay for becoming part of the culture.