http://www.washingtonpost.com/business/economy/google-unified-privacy-settings-unsettle-users/2012/02/27/gIQA7wgseR_story.html

Google unified privacy settings unsettle users

By Cecilia Kang

2/27/2012

Google, I wish I knew how to quit you.

That's the frustration felt by Patience O'Connor, who has put much of her sensitive personal and professional information on Gmail and other Google programs and doesn't want the company to use that data to create a detailed profile of her.

O'Connor said she's overwhelmed by the thought of starting over with a new e-mail service, transferring her contacts, and combing through thousands of messages to retrieve family pictures and legal documents.

That's what Google and other Web firms are counting on as they tap consumers for more information about their lives, analysts say. Once you're hooked on one service, it's hard to switch.

"This is a really hairy choice for me. I'm just really hoping Google changes its mind," said the 65-year-old city planner who lives in the District.

Google will begin Thursday creating far more comprehensive profiles of its users by following their activities across the company's Web sites. From videos watched on YouTube to the terms typed in a Google search, tracking such behaviors will enable the firm to sell ads better suited to its customers' tastes.

Users won't be able to opt out. If they don't like the change, Google has said, they can avoid signing into their accounts or stop using Google products altogether.

But that's easier said than done, experts say. For the 350 million people using Gmail around the world, moving to a new e-mail program is perhaps more inconvenient than changing a mailing address or a bank account.

The "high switching cost" -- as business parlance calls it -- didn't happen by accident, analysts say.

When Gmail launched eight years ago, it quickly supplanted AOL and Hotmail as a leading e-mail service. It was free, storage was unlimited and it was easy to search for past messages. Gmail became even more useful as the company integrated contact lists, word processing, live maps and then later integrated the services on smartphones.

The business plan was clear: Glean information from consumers, sell ads and keep everything free.

"Let's not forget, Google is a huge advertising business," said Morgan Reed, executive director of the Association for Competitive Technology, a trade group. Referring to the privacy policy shift, he added: "This was coming."

Google officials said they have done a better job than rivals in explaining their privacy policies and providing instructions to users who want to leave. The officials pointed to a team of engineers who created a Web page called the Data Liberation Front, which instructs consumers on how they can export information from the company's 60 services. They noted that users do not have to pay a penalty or break a contract if they exit Google's services.

"Our goal is to make sure users have control of their data," said Brian Fitzpatrick, head of Google's Data Liberation service.

Consumers may be free to leave, analysts said, but Google's services are designed to be sticky. Such tactics are widely used in the tech industry and elsewhere. Apple makes its apps and music on iTunes so they are only compatible with the company's iPhone and iPad. Facebook friends can't be transferred to other social networks. Cellphone companies urge customers to sign contracts. Even banks make it complicated to switch to competitors.

Indeed, the need for high "switching costs," especially in the Web business, was noted by Hal Varian in 1998, before he became chief economist at Google. He noted that fickle consumers can change loyalties with a click of the mouse.

"Once you have a chosen technology, or a format for keeping information, switching can be expensive," Varian wrote in "Information Rules: A Strategic Guide to the Network Economy."

The tug of very popular, free Web services can make switching difficult for users who have invested so much of their digital lives on such sites. After Facebook changed its privacy policies in 2009, irate users threatened to leave and created "Quit Facebook" pages on the social network. But since then, Facebook's user base has continued to grow.

Google's privacy shift has sparked the concern of lawmakers and consumer groups who say Google should make the changes optional.

"It's sort of the story of how you boil a frog in lukewarm water. Google may be capturing its consumers in the same way so that consumers don't understand what is happening until they are cooked," said Bert Foer, president of the American Antitrust Institute.

But for Amanda McArthur of Providence, R.I., the privacy trade-off is worth it.

The 28-year-old has come to expect a personal cost to using Google's free services, including Gmail, photo-sharing service Picasa and Google+, the new social network.

"Google provides us with enough free stuff that if they want to analyze my information for the purpose of creating even better, free products, then so be it," she said.