YouTube

Knol, Google's newly announced online publishing service, is an ominous direct competitive threat to traditional newspaper/magazine/journal publishers, NOT a challenge to Wikipedia as many in content circles naively and wishfully think.

• Like the frog that has the good sense to jump out of boiling water, but who can be lulled into a false sense of security and get cooked if the tempature increases gradually...
  • ...publishers of all types currently have a false sense of security that Google is targeting Wikipedia and not them because Google has YET to really monetize Google News or YouTube.

Wake up publishers/editors! Google, with by far the world's largest:

Following up on my House testimony on Internet privacy and how Google is by far the biggest threat to people's privacy, let me share some tid bits.

First, John Naughton of the Observer in the UK did a good piece: "Google is watching you. Ready for your close up?"      

• I was glad to see someone else pick up on my characterization of Google's mission as "megalomaniacal."
• A big thanks for Mr. Naughton flagging some hysterical video shorts on YouTube about Google as Big Brother.
  • If you have time for only one of the four, don't miss Google maps Part I. 

Second, if you are interested in how secure Google's system really is and how seriously Google responds to warnings of breaches in their privacy "walls", see this post: "Gaping Hole in Gmail privacy."

Growth: 39% YoY revenue growth on a ~$20b base, in a slowing global economy is impressive. Hats off to Google. Lots of network effects at work as Google sites revenue grew 42% YoY.

Tone: I did note the slightest whif of humility this quarter that external factors had some effect on Google's business, in stark contrast to last quarter's more bold statement that Google saw no effect of the external market or economy on Google's business.  

DoubleClick: As I suspected, CEO Schmidt said in an answer to a question, that Doubleclick was going well but that he would not break out any information -- in Google's well-established sorry-Charlie-style... no insight or guidance for you... The only thing interesting that was said about DoubleClick was indirect, in that Sergey Brin said that the big problem in display is that it is highly-fragmented." Couple that with CEO Schmidt indicating that Google was only months away fom offering a one-stop advertising solution, one can surmise that Doubleclick will indeed prove to be a material growth kicker to help Google fight off some of the natural drag of the law of large numbers.  

Mention most worth follow-up: In Q&A my ears perked up when the CFO explained part of a cost jump was "legal costs" and CEO Schmidt chimed in that these costs were "bursty." I am amazed that a $20b company that gives minimal detail would mention that legal costs were a factor. Do you know how unusually big a legal number has to be to pop up in an earnings call? Did they settle some case that we don't know about? or is the Viacom-Youtube discovery work a lot more costly than Google has let on? Something is amiss and worthy of followup.   

Below is the segment of my House testimony on Internet privacy where I list the exceptional depth and breadth of intimate (potentially blackmail-able) information that Google routinely collects and stores about you with their "unauthorized-web-surveillance" of Internet users - even users who have no idea Google is tracking/stalking them.

"Consider the depth and breadth of intimate information Google collects:

o What you search for;

• (a Ponemon Institute survey of 1,000 Google users found that 89% thought that their searches were private and 77% thought Google searches could not reveal their personal identities – wrong on both accounts.)

o Where you go on the web;

• Google has pervasive unauthorized-web-surveillance capability (web tracking/stalking) through a combination of Google’s search, Google’s cookies, DoubleClick’s ad-view recording capability, Google’s extensive content affiliate network of hundreds of thousands of sites, and the wide variety of Google apps.

o What you watch -- through YouTube;

I got to wondering why so many supposed "public watchdogs" are AWOL on Google's threat to privacy, when I was reading the LA Times excellent editorial where they ponder the question: "Why is Youtube Hoarding Data?" 

Other than the New York Times last year taking Google to task for StreetView in "Watching your every move?" the editorial boards around the country have be uncharacteristicly silent on Google's unprecedented collection of more private information on more people than any time in history, while being ranked worst in the world on privacy by Privacy International.  

Kudos to the Washington Examiner for their great article exposing Google's "secrecy" in filming its privacy-invading StreetView product. Google guarding its privacy to invade yours! This is another precious example of Google's double standard philosophy of one set of rules for "don't be evil' Google and another set of rules for "the evil" unwashed masses.

• From the Examiner article: "Google officials say controversy about whether the filming violates privacy is partly to blame for the secrecy. Though the Mountain View-based company says public filming is legal, it fears angered residents might harass the drivers or tamper with the expensive cameras." 
  • Google of course must respect the 'privacy' of its drivers, while its drivers trample on the privacy of everyday citizens, or in Google parlance, the "targets" for their targeting advertising.

As many readers of this blog know, one of my pet peeves are double standards. Google's elitist and sanctimonious expectation that they don't have to follow the same rules as their user "targets" -- enthrones Google as the King of Double Standards!

Let's review just a few of their whopping double standards:

This post documents the pile of evidence that Google just gives lip service to privacy matters.

• A few days ago, Google quietly and begrudgingly complied with California privacy law by putting a privacy link on its home page. Kudos to Saul Hansell's New York Times blog which spotlighted Google's privacy intransigence.

I will analyze Google's privacy policies to show why it was no fluke that privacy watchdog, Privacy International ranked Google worst in its world survey on privacy and called Google "hostile to privacy."

First, consider the way that Google finally posted its privacy link on its home page. While it may now be in compliance technically, it sure isn't embracing the letter or the spirit of privacy law. 

We learn from the AP that J.Edgar Google can indeed track what you are individually watching on YouTube.

• AP: "In a statement, Google said it was "disappointed the court granted Viacom's overreaching demand for viewing history. We are asking Viacom to respect users' privacy and allow us to anonymize the logs before producing them under the court's order."" [Bold added]
  • The obvious implication here in Google's own words is that the logs of people's YouTube viewing habits are not anonymous to Google -- they can track what you are watching, but no one else should be able to -- because it would be a privacy problem for another company to clandestinely surveil users -- but of course not for Google to do it -- because only Google has the "don't be evil" motto and the special Monopoly" "Get-out-of-jail-free-card" that comes with it.   
  • As a New York Times article on the same subject suggests, Google is exploiting another privacy loophole:
    • "Congress passed the law to protect the video rental records of individuals, after a newspaper disclosed the rental records of Robert H. Bork, then a Supreme Court nominee."

Where's the free speech outrage when Google, the Internet's Ultimate gatekeeper, blocks free speech on the Internet in clear violation of the FCC's net neutrality principles?

• Many bloggers "received a notice from Google last week saying that their sites had been identified as potential “spam” blogs. “You will not be able to publish posts to your blog until we review your site and confirm that it is not a spam blog,” the Google e-mail read" per the New York Times Bits blog by Miguel Helft.      

Google's well-known dominant share of the search market makes Google the Internet's primary gatekeeper and self-appointed organizer of the world's information. As I have written repeatedly, Google has more unaccountable power over the world's information than any entity in the world, see here, and here.

Why do the media listen and report on Free Press, Public Knowledge, and other consumer groups when they make a federal case out of alleged net neutrality violations by broadband companies, but are totally silent when Google violates the very principles they allege to cherish and fight for? 

A new article/study by Harvard Business School Professor Anita Elberse challenges the validity of the Silicon Valley mantra/theory that the Internet created a new "long tail" of demand for niche products that would ultimately undermine and overwhelm the offline trend towards "big hits."  

• Thank you to Lee Gomes of the Wall Street Journal whose excellent article: "Study Refutes Niche Theory Spawned by Web" brought the new Elberse research to my attention.
  • From Mr. Gomes article: "Prof. Elberse looked at data for online video rentals and song purchases, and discovered that the patterns by which people shop online are essentially the same as the ones from offline. Not only do hits and blockbusters remain every bit as important online, but the evidence suggests that the Web is actually causing their role to grow, not shrink."

Why this is such important new research is that much of the Silicon Valley 'pixie dust' that fuels so many of the new business models involving social networking, crowdsourcing, etc. is predicated on the "Long Tail" book/theory by Wired magazine editor Chris Anderson.