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Google’s Achilles' Heel: The China Example
The fallout from this might mean Google shuts down operations in the world’s second largest economy

LBS on Ulitzer

Location Based Services on Ulitzer - Wikipedia defines an Achilles' Heel as, “A deadly weakness in spite of overall strength, that can actually or potentially lead to downfall.

While the mythological origin refers to a physical vulnerability, metaphorical references to other attributes or qualities that can lead to downfall are common.”

Google recently announced that they have reversed course and will no longer tolerate Chinese Government-imposed (in 2006) censorship of their Google China search engine results.

The fallout from this might mean Google shuts down operations in the world’s second largest economy.

The reason Google might bail out of China altogether (versus continue to submit to Chinese government censorship and control for the right to operate in China) is less about what objectionable terms or images might be displayed by a Google search result and more about Privacy and Trust as related to Gmail. Privacy and Trust are everything to Google, as they continue to aggregate data on everyone who uses their free products and use this information to display the related, effective, personalized ads that power the Google engine.

Have you ever noticed how people physically cringe at cocktail parties when the subject of the breadth and depth of what Google knows about them as fuel for their behavioral ad model comes up? Even loyal Google users often do not seem to fully grasp the level of trust they are placing in this for-profit corporation, as their use of Google drives Google revenue to the tune of $20+ billion annually…and I think Google wants it this way.

To be effective, Google must maintain 100% security around the personal information it uses to power it’s altruistic mission to make your life easier, better, and smoother through the litany of Google products it gives away. The “Power Of Free” is only trumped by the necessity of the airtight security that allows the Google model to flourish.

The Chinese Government has not only asked Google to censor search results, but it allegedly has hacked into the Gmail accounts of human rights activists in China. Could China’s communist government use this private information to impose real world drag-you-from-your-house-in-the-middle-of-the-night-never-to-be-heard-from-again style repression of its citizens? Scary.

This from Google’s Chief Legal Officer David Drummond yesterday, “..we have discovered that the accounts of dozens of U.S.-, China- and Europe-based Gmail users who are advocates of human rights in China appear to have been routinely accessed by third parties.” Yikes.

To understand the impact of the Gmail breaches in China, it’s important to remember how Google makes its money. In somewhat simplified terms, here it is: Google uses a user’s communications to infer specific facts that then power the delivery of specific, personalized, relevant advertising delivered in the context of this same communication. These ads are effective and earn Google enough money by their performance to allow Google to make a profit and supply the product (Gmail) for free, while funding continuous improvements.  (This is not necessarily a negative and all users agree to Google’s terms when they sign-up to use these free tools.)

As long as the consumer does not mind sharing private information, the whole machine gains steam by the fact that some of the ad-generated profits go back into making the free product so good that the impact offsets privacy concerns. The real China problem is that the free Google product used by private citizens was compromised and the impression could be that this could happen elsewhere. While Google says the access was not through any internal Google security breaches, the public relations problem is real.

Google offers powerful tools used every day by millions (myself included) and, as long as the ads they sell to pay for these tools stay unobtrusive and relevant while still being effective, they will succeed and continue to roll out new and exciting (and increasingly disruptive) innovations.

If, however, the Achille’s heel of Privacy and Trust regarding the private data they collect on their users is touched, they need to react with all their might. Google can afford a lot these days, but they cannot afford to have those eyebrows that gets raised at the cocktail parties start catching on and effecting their bottom line.

Read the original blog entry...

About Wilson Kerr
Wilson has 11+ years experience in the Mobile and Location Based Services (LBS) space. Recently, he became Director Of Business Development and Sales for Unbound Commerce, a Boston-based mobile commerce solution provider. He has deep expertise in the areas of mobile commerce, social media, branded location integration, branded content licensing, and is knowledgeable in a broad range of navigation technologies. Wilson has worked with top tier brands, content providers, device manufacturers, and application developers, including Nokia, Unbound Commerce, Tele Atlas/TomTom, The Travel Channel, Langenscheidt Publishing, Intellistry, Parking In Motion, GPS-POI-US, and others. Wilson is a blogger on all things location-based, edits the LBS topic page on Ulitzer, teaches a Social Media 101 class, and has served as a panelist and speaker at Mobile LBS conferences and networking events. Wilson has held positions in Business Development, Sales/Marketing, and Digital Licensing at The North Face, Outdoor Intelligence, Fishing Hot Spots Maps, Tele Atlas North America/TomTom and, most-recently, Unbound Commerce. Wilson left Tele Atlas to start Location Based Strategy, LLC in 2007. Company Website: http://www.LBStrategy.com. Twitter: @WLLK

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