Google’s New Privacy Policy is in Effect

TOM HUDSON: Did you notice anything new if you used Google (NASDAQ:GOOG) to search the Internet today? New privacy rules went into effect for its one billion users. Critics worry Google (NASDAQ:GOOG) users could gradually
lose control of their personal information, but the company says those
rules are still safe, allowing for a more intuitive user experience. As
Darren Gersh reports tonight, one reason behind the change is to help
position Google (NASDAQ:GOOG) for a changing online advertising race.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Jamie Oliver is
the example Google (NASDAQ:GOOG) offered up today for what the online world
will look like under its new privacy policy. If you do a lot of searches
for the celebrity chef on Youtube, Google (NASDAQ:GOOG) says it will now be
able to suggest recipes or serve up ads for cookbooks when you’re using one
of the search giant’s many products. Technology strategist Bill Whyman says
Google (NASDAQ:GOOG) has two goals for the privacy change.

BILL WHYMAN, TECHNOLOGY STRATEGIST, ISI GROUP: When they have a more
accurate view of who you are and what you are interested in, they can
target ads more precisely, get users to click on them more frequently and
hence, get paid more money.

GERSH: Whyman says Google’s other goal is to make a better pitch to
advertisers trying to target a sale.

WHYMAN: We have more and better than what Facebook can give you.

GERSH: Analysts say Google (NASDAQ:GOOG) is trying to make sure
people spend less time on sites like Facebook and more time using Google
(NASDAQ:GOOG) products. That would generate more targeting opportunities
for advertisers and more revenue for Google (NASDAQ:GOOG), assuming users
still trust Google (NASDAQ:GOOG) with their personal information. And for
now, S&P Capital IQ’s Scott Kessler thinks they will.

SCOTT KESSLER, EQUITY ANALYST, S&P CAPITAL IQ: We don’t see any risks
over the near term, but obviously a lot can change in a very short period
of time. The Internet basically guarantees that.

GERSH: Which is what concerns privacy activist Rainey Reitman. She
says Facebook and Google (NASDAQ:GOOG) are launching a new era in online
advertising, testing powerful tools to track behavior and social activity
online.

RAINEY REITMAN, ACTIVISM DIR., ELECTRONIC FRONTIER FOUNDATION: Unless
companies are willing to prove that they can be a little bit stronger on
privacy, they might find themselves in a place where users might begin to
be leery of sharing data with them at all or Congress might think that the
self-regulatory world we currently have online isn’t really doing a good
enough job of defending user privacy.

GERSH: It’s not just Congress — regulators in Europe say Google’s
new privacy rules are illegal, a reminder that companies like Google
(NASDAQ:GOOG) and Facebook have to navigate cultural and legal perceptions
of privacy around the world. Darren Gersh, NIGHTLY BUSINESS REPORT,
Washington.


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