In 2004, Sergey Brin told Playboy magazine he had been surprised by public outcry over the use of targeted ads in Gmail. The email service came under fire again in 2010, when Google began mining Gmail users' personal data for its Google Buzz social network without their consent. That same year, Google admitted that it had inadvertently intercepted emails, website addresses, and passwords as part of a Wi-Fi mapping project.
The Wi-Fi snooping earned Google at least seven class-action lawsuits. The Google Buzz blunder triggered an inquiry by the Federal Trade Commission, and the search giant now must submit to independent privacy audits for the next 20 years. Google has also drawn legal challenges in several countries over privacy issues related to Google Street View.
But none of this may be enough for Google to learn its lesson. The supply of ad dollars isn't infinite, and competition is heating up. The temptation for Google to increase the value of its ads by mining ever more personal data from its users must be great, as must the temptation to focus its efforts on products that increase its share of the overall ad market. Both could come back to bite Google, particularly if the legal climate around individual privacy grows more hostile to advertisers.
An elephant's graveyard of productsDiversification could help the search giant reach new markets, but as much as Google insists that it won't shy away from innovative, risky projects, its track record for turning them into successful products is spotty at best. If a particular product fails to capture the public's imagination, Google is often quicker to pull the plug than to invest in making it a more attractive offering.