Google's Growing Pains

By Edward Cone  |  Posted 04-07-2007

Technology companies don't need cuddly public reputations to succeed. Quite the opposite, in fact, as powerhouses from Microsoft to Oracle to Sun Microsystems—even Apple, with that whiff of smugness about it—have proved over the years.

From the start, however, Google has marketed itself on niceness. It trumpets an unofficial motto, "Don't be evil," publishes a detailed code of ethics for its employees, and adds playful modifications to its home page on holidays. Smart business for a company built in large part on consumer trust, but heartwarming nonetheless.

Lately, though, Google has been acting less like a collective of lovable geeks and more like a big, powerful corporation. Not surprising—it is a big, powerful corporation, one with a responsibility to its shareholders to grow ever bigger and more powerful. But it's still somewhat jarring.

Many of the stories one reads about Google these days involve lawyers and lawsuits. Again, par for the corporate course, and again, not lovable—especially given the way Google seems to use legal combat as an extension of business strategy. As Jeffrey Toobin noted in a recent article in the New Yorker, for example, Google's wealth may allow it to settle a suit filed by copyright holders over digitizing books; paying off the litigants, Toobin wrote, may "create a huge barrier for any new entrants in this field." Not so nice.

Google is also locked in a legal battle with Viacom. In March, Viacom sued the search giant for $1 billion over the constant appearance of its copyrighted material on YouTube, the popular video service Google purchased last year. Google says under the Digital Millennium Copyright Act it has no obligation to seek out such violations without specific complaints, and that may be true. But Google comes across less as a company that wants to gives us all a chuckle over the latest South Park episode, and more like a hungry advertising machine that will walk up to the limit of the law to make a buck. (One bizarre sideshow to this conflict: Mark Cuban, owner of the Dallas Mavericks and founder of Google competitor IceRocket, reacted to YouTube's policy of not screening for copyrighted material by urging readers of his blog to upload their personal porn collections to the site in order to test the limits of its "objectionable content" policy.)

Meanwhile, Google has been playing a no-holds-barred version of the corporate incentives game in North Carolina. The company got a sweet deal on tax breaks and incentives from state and local authorities for a planned server farm in the city of Lenoir—up to $260 million over 30 years. Less sweet was the way Google strong-armed local officials with requests for nondisclosure agreements about public business and public money, threatening to kill the deal if the conditions weren't met. That move left many North Carolinians (including me) feeling slightly ill-used.

None of which may matter to the consumers who trust Google with their search information, or to corporate IT managers who are probably more interested in Google's response to the enterprise-search appliance offered by IBM and Yahoo! than in some mythical standard of sweetness and light. You have to wonder, though, if there might be a business cost associated with the reputation shift—if Google has given up something along the way.