There has been a lot of noise around Google changing its privacy policies. My esteemed colleague Dave Kearns said that they just consolidated them. I’ll stay with “changed”, due to the effect of this: Google now can do much more with the user’s data – if the user logs into any Google service. So my point is that discussions about changing or consolidating is splitting hairs. In fact they have changed the way they deal with privacy.

Google claims to have done this because their customers want it. I doubt that. Customers want Single Sign-On. But does anybody really believe that customers want Google to have a complete profile of virtually everything they are doing on the Internet? And does anybody really believe that customers are seeking for perfectly targeted advertising? [the choice isn’t “ads or no ads” but “targeted or non-targeted” and I believe people prefer targeted] The same customers that are zapping the TV channels during adverts? Or does anyone really believe a customer wants to “sign-on” to his search engine?

So that appears to just be a very lame excuse for something Google believes is the business model of the future. I have the strong belief that this is the business model of the past. In ten years from now, the real successful businesses will be the ones who build a model on providing value to the customer while ensuring their privacy.

Does this affect the customer? It depends. There is always a choice. My choice has been to finally delete Google from the list of my search providers in Internet Explorer. Given that I never have been really active in Google groups and other Google applications, I only relied on Google search. Now I’ve changed to Bing as the standard search provider and finally deleted all my Google accounts (which, by the way, is much easier and more intuitive than deleting a Facebook account).

From an analyst perspective, it will be interesting to see the mid-term effect that Google’s policy changes will have on the market. How will this affect the market shares in the search engine market? What about other markets Google is playing in? It will be also interesting to observe whether and how others like Microsoft can finance their investments into, for example, Bing without tapping into the privacy-violation-trap. And it will be interesting to observe to which degree (and in which regions) the customers will opt for privacy and vote with their feet.

By the way: Forget about deleting your Google history. You can delete the accounts and the associated data, but not what Google has collected in the past. It’s too late for that.

Regarding what Google is doing and what it means I recommend reading Kim Cameron’s recent post:

Kim really brings it to the point – and the US Attorney Generals do as well. You really should read that post.

Also: The Data Privacy Council of the European Parliament, consisting of Privacy Officers of member countries, has declared the new privacy rules of Google as being not compliant with the European Privacy laws. They recommended in a letter to Larry Page to not apply these policies until this issue is finally clarified. Google rejected this. That might form the foundation for Google becoming the first prominent case under the new EU Privacy laws, allowing, probably starting in 2014, fines up to 5% of the annual revenue. That might even make Larry Page rethink the Google position.

When looking at the loud calls for new, draconian political policies, my view is simple: If there are alternatives, the ones opting for privacy can use them. However, if the will of the user then is ignored and settings are bypassed, I’m a friend of draconian penalties. So it might and should be allowed to sell services and pay with your privacy – but this model has to depend on user consent, there have to be options for deleting that data and thus changing the will, and doing it without this consent is just unacceptable. Interestingly, new approaches of Personal Life Management like also allow the use of private data and rely on that – but there is user consent and control. They might not be perfect yet and the business model still has to prove that it works. But it’s obvious that it isn’t mandatory to give up privacy (at least not beyond a specific point, sort of the Rubicon Google now has crossed) to gain the advantages of the “modern Internet” (e.g. the services users might want to have).