Does iGoogle’s Convenience Trump Privacy?

What’s the big deal? Sure, it’s Google, the big dog of Internet search, and the object of increasing scrutiny as its wealth and power continue to grow. And, yes, the new service, dubbed iGoogle, was characterized as “a little creepy” by none other than Google CEO Eric Schmidt, speaking at last month’s Personal Democracy Forum in New York.

iGoogle, introduced in early May, lets users customize their home pages to create a more personalized online experience. In its most basic form, iGoogle includes modules for search, news, scheduling and weather, but users can choose from thousands of other options as well. “It’s a pretty powerful notion of having a computer that’s so personal it actually understands almost the way you think,” Schmidt said.

To deliver that level of feedback, Google will need to know pretty much everything its users are up to online. Sounds like spyware—just out in the open, for all the world to see. And, as the company with the “Don’t be evil” motto insists, without a malevolent agenda.

The upside for Google? The more personal information the company can gather, the more it can effectively target its ads—and charge advertisers premium prices. And Google’s information-gathering techniques could present a compelling case for companies that want to direct their messages to finely targeted audiences. If a user specifies weather and search in and around a particular geographic area, for instance, wouldn’t local providers jump at the chance to push their services straight to that user’s screen? And wouldn’t the user want such services?

Sounds logical. But not everyone likes the idea. Shortly after iGoogle’s launch, an independent panel from the European Union sent a letter asking Google how, if at all, it shares customer information with third parties. (Google said it would reply in June.) And the Federal Trade Commission is investigating anti-competitive issues regarding Google’s planned acquisition of online ad provider DoubleClick. Privacy advocates have asked the agency to look into the company’s practices, according to an FTC spokesman, but the FTC has not yet determined if privacy will be part of its investigation.

Of course, personalization is nothing new when it comes to the Internet. A decade ago, college kids used crayon to create their own news summaries. American Online, Yahoo and other portals let users alter home pages to their liking. The options are nearly endless. Still, privacy concerns abound. With a flood of identity theft and data loss incidents in recent years, worries about where personal information goes after it is logged are justified.

Google says it encrypts payment details and personal data. But other organizations, including the Veterans Administration, ChoicePoint, the Federal Deposit Insurance Corp. and LexisNexis, have all but guaranteed the safety of user data, only to have it hacked or stolen or sold to the highest bidder. Yet iGoogle, however powerful it proves to be, won’t be the last innovation in information gathering on user behavior. Consumers have two choices: Opt in for convenience, or opt out for privacy. There doesn’t seem to be any middle ground.

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