Google Fumbles A Pretty Good Privacy Policy

| About: Alphabet Inc. (GOOG)

If Google (NASDAQ:GOOG) has a dangerous weakness, it is messaging.

This is pretty amazing for a company whose financial success is built on advertising, on providing attractive billboards with which companies of all sizes and kinds try to build markets for what they sell.

But it's true, which became very clear this week when the company unified its privacy policies.

The policy itself is fairly straightforward, and Google published a nice FAQ. Basically they're going to use everything they get on you, but they will anonymize most of it first, meaning it can't readily be traced to you. What isn't anonymized will only be revealed to people you've previously identified as acquaintances through Google Plus, after you're signed on to Google services like Mail. They will know you as someone with specific interests and buying habits, and this knowledge will follow you on whatever service Google provides.

The policy is credited to Alma Whitten, appointed director of privacy a year ago, and the company even let CNN do an admiring portrait of her.

The unified policy put Google in great shape to handle E.U. privacy policy changes, which the U.S. government is actively protesting on behalf of the rest of the industry. In fact E.U. ideas such as "the right to be forgotten" can readily be handled by the new Google policies, since for the most part they've forgotten you anyway.

Still, while European elites appear satisfied there remain a host of privacy advocates like the Open Rights Group and Consejo de Latinos Unidos, who quickly condemned the policy.

Politicians like Connecticut Sen. Richard Blumenthal also took up the call, and pundits called it the end of the anonymous Internet. Sure, the company may have planned its "Good to Know" ad campaign for months, but now the ads must flow up a mountain of skepticism, and possible FTC action.

The change in privacy policies came after the announcement of Google Social Search, which combines data from a variety of services in search algorithms, and its effort to push Google Plus on new Google Mail customers, which created a tremendous backlash that may not have been necessary had the privacy policy merely been announced beforehand.

So while Google is pulling its corporate policies together, investors should hope it also pulls its messaging together, or they're going to lose even more money than they've lost so far this year.

Disclosure: I am long GOOG.

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Tagged: , Internet Information Providers
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