When Google rolled out Buzz in mid-February, people were angered by the type of privacy breaches which have plagued another social medium. The three main issues for Buzz were:

• auto generation of follower lists from individuals’ private email and chat behavior
• auto completion of some email addresses in a feature similar to Twitter’s @reply
• auto connection to Google Reader and Picasa Web Albums.

Google responded to privacy concerns within days. However, for some who had very real privacy concerns, this simply wasn’t good enough.

I use my private Gmail account to email my boyfriend and my mother.

There’s a BIG drop-off between them and my other “most frequent” contacts.

You know who my third most frequent contact is?

My abusive ex-husband.

Which is why it’s SO EXCITING, Google, that you AUTOMATICALLY allowed all my most frequent contacts access to my Reader, including all the comments I’ve made on Reader items, usually shared with my boyfriend, who I had NO REASON to hide my current location or workplace from, and never did.

There’s still a lot to learn about how we integrate privacy into new products, but we know the golden rule - personal information should never be published without personal consent.

I had the privilege this week of attending a lecture by Professor Hal Varian, Chief Economist for Google. Varian discussed the advent of computer-mediated transactions and how they transform our business practices.

There were a couple of interesting points he raised: historical (in a pre-literate and pre-numerate era, how could people shipping barrels of olive oil have any confidence that the amount of oil that left was the same amount that arrived?), logistical (computer-mediated transactions enable more and more complex contractual arrangements), and conceptual (behavioral targeting, etc.).

This last, conceptual, is a big thing for Google these days, since they’ve been in the behavioral targeting business for all of two weeks. It’s also where Varian started to get into Web Genome Project territory. I found one thing he said particularly interesting:

In general, people have no problems with the intended use of data (more relevant content, etc.). What people are worried about is the unintended use of data (AOL’s massive data spill, etc.). The problem, therefore, is not so much a privacy problem, but rather a security problem.

That’s a pretty interesting comment, and it certainly rings true to me. “I don’t want Google knowing all this stuff about me,” people say. “Who knows what they’re going to do with it? What if somebody unscrupulous gets their hands on it?”

The core proposition of the Web Genome Project is personalisation with privacy. In light of Varian’s comments, however, it’s worth revisiting that proposition, because in fact it’s much stronger than that. The WGP model means that no clickstream or historical data is ever collected in the first place. If a thief were to break in, the vault would be empty; there’s just nothing there. So the model actually eliminates the entire question of privacy. It doesn’t much matter whether I can keep your data private if I don’t have any data on you to begin with.

Gratifying stuff from someone who’s earned his stripes. What are your thoughts about privacy vs. security?

Google has long been a staunch advocate for net neutrality: the idea that Internet service providers should not be able to adjust transmission speeds according to the type of content being transmitted. This stance is certainly logical: adjusting speed for bandwidth-hogging content could certainly affect some of Google’s properties, like YouTube.

So you can understand why there was a bit of finger-pointing this week — specifically, by the Wall Street Journal — when it seemed Google was trying to get a ‘fast track’ for itself by partnering with ISPs to co-locate servers directly within their facilities. The article’s authors, Vishesh Kumar and Christopher Rhoads, made it clear from their tone what they thought of the plan:

Google’s proposed arrangement with network providers, internally called OpenEdge, would place Google servers directly within the network of the service providers, according to documents reviewed by the Journal. The setup would accelerate Google’s service for users. Google has asked the providers it has approached not to talk about the idea, according to people familiar with the plans.

Asked about OpenEdge, Google said only that other companies such as Yahoo and Microsoft could strike similar deals if they desired. But Google’s move, if successful, would give it an advantage available to very few.

Understandably, Google immediately came back on its Public Policy blog, calling the WSJ piece “hyperbolic” and “confused”. Richard Whitt, who made the post on behalf of Google, also says he doesn’t remember making a comment attributed to him by the Journal, and refers to several others quoted in the original article who had objections to it.

Net neutrality says that the highway can’t dictate which cars get to go which speeds. If you drive a Hyundai, you have the same opportunity to hang out in the fast lane as someone who drives a Porsche. At the same time, the highway also can’t dictate where you live — and, by extension, where you get on or off the highway. So if you choose to live one exit away from your work, you’re going to get there faster than someone who lives ten exits away, no matter what kind of cars you both drive.

Based on my admittedly limited understanding, it appears that Google’s proposal falls more into the second situation than the first. That is, Google appears to be trying to put the physical source of content as close as possible to its physical destination, so this is not an issue of net neutrality.

At the same time, most websites don’t have the resources to even begin to optimize for this problem. You don’t spend your time moving your servers in with your ISPs until you have a big enough setup and a big enough audience and — let’s be honest — a big enough bank account to make it worthwhile. Even though the option is theoretically available to anyone, practically it’s only available to a small few.

So a violation of net neutrality? Perhaps not. But it’s not necessarily a bad thing that people are jumpy when it comes to Google.

Google is great because it helps us access the greatness that is the Internet. If the Internet were only Google, I don’t think it would be so great. What do you think?

I have to confess an addiction to the presidential campaign. I follow it obsessively, every twist, every turn, every gaffe, every SNL skit. I am in awe of the sums of money being raised and spent.

But despite all the campaign spin and rhetoric, and even with the bailout story reaching fever pitch, we all know that the true balance of power lies elsewhere: in the halls of little company based out of Mountain View, California.

Think about it. 144.7 million Americans used Google last month — more than the number of people who voted in the 2004 Presidential election. The company has just under 20,000 people on the payroll, more than triple the number employed by the White House. Thousands upon thousands thrive in the Google economic ecosystem. 300 million shares? 300 million Americans? coincidence? I think not.

They’ve got an environmental policy. They’ve got a Chief Economist. They’ve got a market cap roughly equal to the entire GDP of New Zealand.

What they do, matters.

The only bummer about this situation is that, even though the Big G has as much or more of an impact on our daily lives as the guy in Washington, we still can’t vote for its President. Well, we can, but let us face the matter squarely: thanks to Google’s dual-class share structure, our votes won’t make any difference.

Then again, we probably shouldn’t vote. Our democratic process has led us to meltdowns on Wall Street; Google’s benevolent dictatorship has produced the fastest growing company in history. In the past year alone, they’ve added thousands of new jobs and stepped up their sustainability efforts. No, it’s probably best that we surrender to the wiser governance of Schmidt, Page and Brin.

Sure, every now and then they’ll get it wrong. United Airlines will lose 76% of its market cap because Google News mixed up its dates. Some poor guy who hits the lottery with an all-Google business model will learn that he shouldn’t sink a foundation in shifting sands. Sergey Brin will be forced to admit that censorship ain’t cool.

For the most part, however, Google treats its citizens (that is to say, all of us) well. It’s certainly had a greater impact on our efficiency than anyone in the White House ever did, except maybe that guy who invented the Internet itself. On the other hand, a lot of that efficiency is wiped out by the productivity drains from YouTube, so maybe the company’s contribution is a net wash.

In closing, when you’re thinking about your choices this election year and feeling the pressure to choose the perfect candidate, be grateful. The decisions that matter most have already been made. The triumvirate in charge isn’t going anywhere. And if our nation were run as well as that little company based out of Mountain View, we’d probably be in a lot better shape right now.

Earlier this week, the LA Times ran an interview with Google’s Marissa Mayer on the momentousness of the company’s tenth birthday and where the big G is headed. Here’s what she had to say about where they’re headed in the next ten years.

I think there will be a continued focus on innovation, particularly in search. Search is an unsolved problem. We have a good 90 to 95% of the solution, but there is a lot to go in the remaining 10%. How do we monetize new forms of content as they come online such as video, maps and books. How do we help content providers transition their businesses online and build healthy businesses.

Mayer later clarified the comment:

We?re all familiar with 80-20 problems, where the last 20% of the solution is 80% of the work. Search is a 90-10 problem. Today, we have a 90% solution: I could answer all of my unanswered Saturday questions, not ideally or easily, but I could get it done with today?s search tool. (If you?re curious, the answers are below.) However, that remaining 10% of the problem really represents 90% (in fact, more than 90%) of the work. Coming up with elegant, fitting and relevant solutions to meet the challenges of mobility, modes, media, personalization, location, socialization, and language will take decades. Search is a science that will develop and advance over hundreds of years. Think of it like biology and physics in the 1500s or 1600s: it?s a new science where we make big and exciting breakthroughs all the time. However, it could be a hundred years or more before we have microscopes and an understanding of the proverbial molecules and atoms of search. Just like biology and physics several hundred years ago, the biggest advances are yet to come. That?s what makes the field of Internet search so exciting.

This description makes me think that we’re using the wrong metaphor. “Search” is not a single problem to be solved, any more than biology or physics is a single problem. It is an evolving field of study, deeply integrated with and dependent on the behavior of evolving human beings.

In cycling, we say you can never beat a mountain, only yourself. The mountain is there, immovable and immutable; it doesn’t care how fast you ascend it. All you can do is try to climb it faster than you did the last time.

I believe search is like that. How will we ever be able to say it’s solved? Surely it will ALWAYS be improvable, challenging, and changing. It’s like saying, “The marriage has been 90 to 95 percent solved.”

When asked which new initiative is most promising in terms of another source of revenue, Mayer responded:

We will certainly remain centered on ads. We are also looking at new ways to deploy ads: YouTube advertising for a better way to monetize video content, scanning content with book search for advertising that monetizes better. We are also exploring paid services, such as paying for Picasa storage or additional storage in Gmail. These are small businesses that are just getting started and this is a new business model for us. But it is one thing we are experimenting with.

Right now, there are a lot of companies out there that are hoping to stumble on a way to monetize their big ideas, and it may comfort them to know that Google has the same hope. It will be great when Google (or somebody) comes up with a better way to monetize video content. I’m surprised to hear her talk about paid storage as a future source of revenue, given that $0.00 is the future of business.

Monetization is a problem that is textads% solved, but the remaining videostorageandsocialnetworking% will take decades.

I really admire Mayer for what she’s accomplished, and, although I sometimes take Google to task on this blog, I really admire Google as well. That doesn’t mean the company’s perfect, and they clearly don’t have all the answers — which will guarantee that the second ten years will be as fascinating as the first.

Where do you see Google going over the next decade?

Hat tip: ZDNet

The topic of privacy in behavioral targeting seems to come in waves. One minute, it’s all anybody talks about, and you’d think the entire infrastructure of the Internet would come crashing down if somebody didn’t solve this problem right quick. The next minute, it seems we’ve got a ‘Don’t ask, don’t tell’ policy, and the issue gets shunted to the back burner.

Just recently, we’ve been squarely in that first phase, starting with

Anecdote 1: Elyse Tager’s piece Privacy and Behavioral Targeting Heat Up at ClickZ.

Elyse talks about the challenges faced by cookie-based behavioral targeters who use historical information to infer future behavior:

NebuAd launched with all best intentions, attempting to address the issue of scale with its now huge network — a major disadvantage for behavioral targeting in most cases. Plus, NebuAd has a robust privacy policy addressing consumer concerns directly.

But last week, two of those ISP partners backed out of the relationship. Charter Communications announced it was withdrawing due to subscriber concerns. CenturyTel is pulling out after the warnings from Reps. Edward Markey, a Massachusetts Democrat, and Joe Barton, a Texas Republican, who said the technology “raises several red flags.”

The red flags in question have to do with the amount and detail of data being collected about individuals. It’s a problem endemic to targeting solutions that rely on knowing as much detail as possible in the hopes that the behaviors will be repeated.

Tager points out two solutions being proffered: data portability and predictive modeling.

Another solution, which I covered in earlier columns, is predictive modeling to better target behavior. Companies such as aCerno and Epic Advertising use advanced algorithms and technologies that don’t rely on cookies to establish inferred behavior, which is less intrusive and far more predictive of future behavior, according to these suppliers.

As you’ll know if you read this blog with any regularity, VortexDNA relies on a predictive modeling approach.

Personally, I believe data portability is only a solution for the technological elite. It is simply not feasible to ask my mom to manage her data.

The FTC is pushing for self-regulation. If the issue were between the Market forces, on the other hand, will make a difference. NebuAd’s ISP partners backing out will make a difference. Will it be enough, though? Congress might not think so, which leads us to

Anecdote 2: Heather Green’s piece Congress to Push Web Privacy at BusinessWeek.

On the second page of the article, Green mentions The Center for Democracy and Technology’s desire for a Do Not Target list (along the lines of the Do Not Call list). What she doesn’t mention is the obvious problem with such a list: in order to not target you, they have to know who you are. So you have to register in some way, giving them the very information you’re hoping to keep from them.

She closes with an apt comment on the benefits of federal privacy legislation:

Some in the industry think that legislation might be the way to set a common standard and avoid inconsistent, piecemeal legislation on the state level. Microsoft came out in 2005 in favor of federal privacy legislation and thinks others are beginning to agree. “Companies are coming around to the notion that it’s not only compatible with their business practices but [that it] can help them by enhancing consumer trust and making compliance more streamlined,” Microsoft’s Hintze says. Microsoft advocates privacy baselines that cover not just the online collection of data, but offline collection as well.

David Hallerman, analyst at researcher eMarketer, says legislation would go a long way toward assuaging fears of advertisers who fret consumers don’t want their privacy compromised. He says that if an online privacy law were passed, “the benefit would be there for advertisers, publishers, and the public.”

Given public concerns about privacy, I tend to agree with Hallerman. Allow companies whose practices are aboveboard the opportunity to be recognized as such. I like that Microsoft is getting behind it. Google seems to be going in a different direction, as evidenced by

Anecdote 3:Wendy Davis’ piece Polish On Google?s New Chrome Tarnished By Privacy Questions at the Daily Online Examiner.

So Google is finally trying to take the battle to the Microsoft-controlled browser terrain, instead of just hanging out comfortably on the high ground of search and letting Microsoft lose battalion after battalion in a series of poorly-planned attacks. According to Davis, though, the new browser is a long way from offering any privacy benefits:

…the browser raises significant privacy questions. Google states in the Chrome privacy policy that it will log the IP addresses of people who download the browser. It also says that all URLs or other queries typed into Chrome?s address bar will be sent to Google, which will use that information to make suggestions to users.

The browser?s privacy policy says it will ?process? information received from Chrome users but ? in a crucial omission ? doesn?t say whether it will retain the data or for how long: ?Information that Google receives when you use Google Chrome is processed in order to operate and improve Google Chrome and other Google services,? the policy states.

I don’t think consumers are going to go for it. It’s too intimate to gather these different services together. It’s like your bank buying your DVD store, and the guy who approves your loans also gets to know about your perverted taste in movies.

The bottom line is that the privacy landscape is shifting. So how should you handle your own privacy policies?

Do the right thing.

Some years ago, a friend of mine urged me to become an SEO, touting tactics that were legal and fine at the time but that would be considered black hat today. “It’s so easy! All you have to do is use this automated program that will create hundreds of sites at once, all linking back to your client’s site.” Thankfully, I didn’t go for it; I might have made money in the short term, but it would have been bad news in the long run.

The same holds true for privacy. Forget about what you can technically get away with, or what you can assume your customers won’t notice. Just do the right thing. Be fair. Consider the customer. Consider the cost to them as well as the benefit. And behave in a way that lets you hold your head high.

In a mixed up, muddled up, shook up world, your integrity is a real asset.

Your thoughts on this topic are welcome.