Hazlett in Financial Times: New Information Flows Require Hard Choices About Trust

While intention-based advertising is revolutionary in its efficiency, Google risks its most valuable asset, consumer trust, if it fails to protect personal data from abuse, according to Professor Thomas Hazlett.

Hazlett's comments are drawn from a May 24 op-ed in the Financial Times in which he looks at the "sensational efficiency" of pinpoint advertising as pioneered by Google Search, pointing out that that same efficiency amounts to an invasion of privacy that could expose Google to genuine risk.

COMMENT: Google's algorithm of life: rejoice and be wary, Financial Times UK, May 24, 2007. By Thomas Hazlett.

"Intention-based advertising is revolutionary in its efficiency. People flock to this environment. Gmail is today a runaway hit.

"At the same time, they will continue flocking only so long as the price is right. If Google fails to protect personal data from abuse, the company's single most important asset goes up in smoke. Without the reputational capital to do seamless business with hundreds of millions of internet users, Google's profits would go the way of the dotcom bubble.

"Google Search, Gmail and myriad other services are today intrusive data mining enterprises - and extremely popular with customers. The company's enormous capital resources, driven by Wall Street's excitement over a media model that actually works, help solve the consumers' conundrum. The share values of the search giant can only tip-toe in the troposphere so long as those hard disks remain protected. When Google scans them to find what job listing we might like to see or what spa we need to visit, we tend to be pretty happy. Where standards slip and private information leaks to unwanted purposes, or is sold to low-ball retailers, we are all going to get crazy. We will take Google's equity with us.

"Google's marketing under the 'Don't be evil' theme is one of the last old-style types of advertising slogan that still works. For customers and shareholders alike. The rude awakening for many is that they supposed that this was a different kind of company and that the markets it opened were upside down from others. They are finding that privacy, like other goods, has trade-offs, and that even the purest of souls must make hard choices."

Read the article