Why Google Scares People

No matter how hard it tries, it seems Google (GOOG) can’t help frightening people. Even its famous “Don’t be evil” policy might scare someone who believes the company’s power or its profits are somehow nefarious.

It may be Google’s business model, rather than anything about the company itself, that gives the public the willies. Google is the undisputed champion at what the MBAs call “monetizing content:” selling advertising to accompany pictures or words. But the content Google monetizes is not, for the most part, its own; it is the stuff other people create and put on the internet. This is not news to anyone, nor is it unique to Google. Yet Google’s scale and scope when combined with its way of making money, which can feel like the exploitation of someone else’s efforts, don’t engender a lot of trust, regardless of the purity of the company’s motives.

A lot of people worked themselves into a lather over new privacy rules that Google rolled out at the beginning of this month. The new policy collapsed all Google services into one, overarching privacy statement. (Google Books, Chrome and Wallet, while consistent with this policy, will maintain additional, separate policies, linked at the bottom of the webpage.) Grouping its products together will offer a more seamless and useful experience for users, according to Google. It will also mean more effective targeting for advertisers.

Some find it unnerving that Google will now group a user’s search history with his YouTube viewing habits, or connect her interests on Google + to the material she looks at on Google Maps. Responses in the days before the changeover ranged from the reasonable to the slightly panicked.

The widespread jumpiness seems somewhat contrary, considering that many of the people complaining freely share their comments, activities, interests and photos with a broad circle of friends and acquaintances via social networking.

Google tried to avoid repeating missteps that it and other companies, including Facebook, have made in the past. Google took pains to make the policy changes, and the implementation timeline, very clear. Should you choose to discontinue any or all of its services, Google itself will point you to The Data Liberation Front, which will help you migrate data out of (as well as into) various Google products. After the debacle of Google Buzz, Google has every reason to want to rebuild user trust.

But that goal may be harder to reach for Google than for other businesses. Many users’ doubts may be subconscious, but they have reason to wonder whether Google, which exploits commercial content to make its money, wants to exploit private data in a similar way.

Yet we put aside those concerns for commercial reasons, as well as for private ones. This column, like all the content on my firm’s website, will be indexed by Google, and may be picked up by the Google News service. Google will sell ads to accompany my work. I won’t get paid directly for writing this opus, but Google very well may make a little money off my efforts.

I enter into this transaction willingly. I want Google to distribute my work because I want to expand my circle of contacts and to stay in touch with those who already know me. Colleagues, friends, clients, strangers – if they think what I have to say is worth knowing, Google will help them find it. That’s my indirect reward.

Personal Google users make the same bargain. We let Google sell targeted ads to accompany our searches, videos and maps, in part because we value the service Google provides, and in part because those ads themselves often give us valuable information. If nobody ever responded to ads on Google, the company would have gone out of business long ago. When I say that Google’s business model gives people a mild sense of the creeps, I don’t mean that the model is intrinsically creepy – though it certainly has been disruptive to all sorts of media companies whose business is to monetize their own content.

If you were already comfortable with Google tracking your search history so it could facilitate your future searches, show you advertisements of potential interest, or just because the idea of Google tracking your search history didn’t bother you, then I doubt you have much reason to care whether Google similarly uses that search history to locate maps or YouTube videos you might want to see.

Some might even welcome the change. Such tracking capabilities can be time savers and life enhancers. Netflix, for example, keeps track of the films and TV shows I watch, and asks me to tell it which ones I particularly liked. As a result, Netflix has been able to recommend many titles that I have enjoyed, and which I would never have found on my own.

By all means, if you don’t want Google tracking your activities, turn that feature off. (Though Google will always track you to some degree, there are a variety of was to disconnect that tracking from your online identity.) However, the Electronic Frontier Foundation’s advice that everyone turn off such tracking seems overwrought and pointless. Most people just don’t care, nor do they have any reason to care, about whether Google collates the information it already gathers. These users may even actively choose to keep their tracking enabled, in order to reap the fullest benefits of Google’s technology.

Internet users widely seem to be growing savvier about who they share with and how. A recent study from the Pew Center’s Internet and American Life Project suggests that users are paying closer attention to who they friend, and making more of their social media use private to those friends that remain. Educating yourself about who can see information about you online and how is all to the good.

Of course, if you routinely sign into a Google account, my guess is that you probably do so because you are a Gmail user. Think of all the private, personal information that is contained in the text of your emails, which you willingly let Google hold and store for you. If you trust Google with that much of your life already, adding your YouTube habits is probably not that big of a deal. If you trust Google to use your data only in the ways it says it will, then whether it keeps that data scattered across services or condensed in one place won’t have a big impact in the long run.

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About Larry M. Elkin 564 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

Visit: Palisades Hudson

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