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Google's defiance may be rooted in strategy
Saturday, January 21, 2006

Google's decision to resist a Justice Department subpoena for data on what people search for on the Web once again puts the company in a contrary position to its biggest competitors.

While America Online, Microsoft and Yahoo! this week revealed they have complied in part with the request for an entire week of search data, Google has refused -- not on the grounds of protecting its user's privacy, but on grounds that the government's request overreaches. The Justice Department suggests that Google believes it would be disclosing trade secrets if it disclosed the information requested.

When search companies and other organizations that track or collect data issue their privacy policies, they usually include a clause that allows them to give the data to the government under subpoena and Google's privacy policy is no different, said David Gurwin, of the Downtown law firm Buchanan Ingersoll.

But being allowed to share the information legally doesn't mean that Google users want the company to share it -- and Mountain View, Calif.-based Google seems to understand that. "If the perception is that Google doesn't value the privacy of its users, Internet users will be less likely to use Google services," Mr. Gurwin said.

In other words, there's a large public relations component in Google's refusal to submit the data. "The user's view is 'If Google gives everything I do to the government, I would think twice about searching for anything on Google,' " said Santa Barbara, Calif.-based Internet consultant and marketer Jim Sterne.

Such a pullback could decrease the number of Google searches -- now estimated at 300 to 400 million a day -- and decrease revenue for the search leader. That concern, and the clash between privacy and the government, may have played a role in yesterday's steep sell-off of Google shares, which plunged 8.5 percent, its biggest one-day drop since going public in August 2004, to $399.46, down $36.99.

Why is Google willing to resist the government while the other three companies are not? Perhaps because it has the most to lose -- or at least probably perceives that it has the most to lose, said Randy Pausch, a Carnegie Mellon University professor.

He suggests that the government is not looking for specific evidence of a crime but is simply data mining, in which it takes the data they get from the search engines and runs it against other data obtained from other sources.

This would help the Justice Department make a case for new legislation to replace the Child Online Protection Act of 1998, whose enforcement was struck down by the U.S. Supreme Court in 2004 because it interfered with the rights of adults, overreaching the law's charter to protect children.

That act, designed to defend children from online pornography, is what Justice officials cited in issuing the subpoenas to Google and the other search firms last August.

"Evidence is always more powerful when you have numbers to back [it]," says Raul Valdes-Perez, chief executive officer and co-founder of Squirrel Hill search engine company Vivismo. Without Google's results in their data, the government's case is not comprehensive, he said.

While Mr. Gurwin and Mr. Sterne say that Google is taking a stand to show its users that the company lives by its corporate motto, "Don't be evil," by not revealing information about them, they also state that it's difficult to know the exact reason why Google is taking its stand.

Mr. Sterne says that the company might be using the decision as a publicity ploy, holding out until the government changes the wording enough on its request to allow Google to claim to protect user data while still handing it over. It's possible Google may have trade secrets to protect, he added.

Mr. Pausch says the secrets might be subtle, such how long it keeps data. By combining several subtle practices, competitors can get a better big picture view of how Google operates.

But even if there are trade secrets in the data, Google should be able to work out an arrangement with the government to provide the data in a manner that is protected from public eyes -- thereby not revealing the trade secrets to competitors, Mr. Gurwin said. "They can reveal things under protective orders."

First published on January 21, 2006 at 12:00 am
David Radin is a free-lance writer.
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