Pot Calls Kettle Invasive: Is Microsoft's Privacy Any Better Than Google's?

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You may have noticed that Google (Nasdaq: GOOG  ) changed its privacy policies. In fact, I'd be surprised if you didn't know, and I might ask for a ticket to visit the rock you're living under. Big G is under all kinds of fire for supposedly putting its users in harm's way with the new policy. Most notably, Microsoft (Nasdaq: MSFT  ) took out expensive, full-page newspaper ads to spread exactly that message and to promote Mr. Softy's competing services. "Gone Google? Got Concerns? We Have Alternatives," the ads proclaim.

Google disagrees with that notion, of course. In a myth-busting blog post, Google walks down Redmond's criticism one by one to debunk them. The main point is, Google isn't doing anything new to exploit your personal information. The recent changes were meant to simplify an unwieldy bunch of separate policies per service into a smaller set of more readable language.

What's the big deal?
The company isn't exactly breaking new ground here, and I think we users should appreciate having less legalese to read before using any of Google's online services. I mean, you do read every privacy policy you come across, right? Yeah, just before ignoring the click-wrap user license. Just what I thought.

It might be instructive to show just how standard Google's data use actually is, so here's a sampling of quotes from the privacy policies of prominent online businesses. Let's learn how these guys use our personal information:

The Google policy that started this ruckus: "We use the information we collect from all of our services to provide, maintain, protect, and improve them, to develop new ones, and to protect Google and our users. We also use this information to offer you tailored content -- like giving you more relevant search results and ads."

Microsoft: "Microsoft collects and uses your personal information to operate and improve its sites and services. These uses include providing you with more effective customer service; making the sites or services easier to use by eliminating the need for you to repeatedly enter the same information; performing research and analysis aimed at improving our products, services and technologies; and displaying content and advertising that are customized to your interests and preferences."

Yahoo! (Nasdaq: YHOO  ) : "When you register with Yahoo! and sign in to our services, you are not anonymous to us. [...] Yahoo! uses information for the following general purposes: to customize the advertising and content you see, fulfill your requests for products and services, improve our services, contact you, conduct research, and provide anonymous reporting for internal and external clients."

Facebook: "We use the information we receive about you in connection with the services and features we provide to you and other users like your friends, the advertisers that purchase ads on the site, and the developers that build the games, applications, and websites you use. [...] Granting us this permission not only allows us to provide Facebook as it exists today, but it also allows us to provide you with innovative features and services we develop in the future that use the information we receive about you in new ways."

AOL (NYSE: AOL  ) : "Your AOL information is used to operate and improve our services, fulfill your requests and communicate with you, conduct research, and personalize the content and advertisements provided to you."

eBay (Nasdaq: EBAY  ) : "We don't sell or rent your personal information to third parties for their marketing purposes without your explicit consent. We may combine your information with information we collect from other companies and use it to improve and personalize our services, content and advertising. [...] Our primary purpose in collecting personal information is to provide you with a safe, smooth, efficient, and customized experience."

The Motley Fool (yes, of course we have a privacy policy): "The Motley Fool collects personal information to provide you, the user, with the best and most personalized experience possible, and to provide our advertisers with an efficient way to reach the right audience. In short, by knowing a little about you, The Motley Fool can deliver more relevant content and advertisements to you."

Foolish takeaway (Egg Foo Young, please!)
These are but tiny snippets out of much larger policies, of course. But I think the information use is at the heart of all the privacy concerns you see bandied about these days. And as it turns out, pretty much anybody that knows anything about you will try to use that information to improve its services and -- yes -- to make its advertising more effective. That includes us here at Fool Hill, Google, and Microsoft.

I think Redmond is busy throwing stones in a glass house, but I'm also sure that this standard practice is pretty benign and not much cause for alarm in the first place. We're using all these amazing online services every day, whether they're branded as Google, Bing, or AOL, and it's all free most of the time. Don't forget that there's always a business behind the pixels.

Redmond is absolutely allowed to recruit customers to its own ad-supported services by any legal means necessary, but there's also nothing wrong with Google's new policies. If you don't believe that Web services have a right to monetize their precious eyeballs the best they can, I don't think you believe in capitalism at all. Feel free to sit out the game-changing revolution that keeps Bill Gates up at night while the rest of us embrace the business possibilities of an open Internet.

Fool contributor Anders Bylund owns shares of Google but holds no other position in any of the companies mentioned. The Motley Fool owns shares of Microsoft, Yahoo!, and Google. Motley Fool newsletter services have recommended buying shares of Yahoo!, Google, eBay, and Microsoft. Our newsletters have also recommended creating a bull call spread position in Microsoft and writing puts on eBay. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 03, 2012, at 11:16 AM, baldheadeddork wrote:

    "If you don't believe that Web services have a right to monetize their precious eyeballs the best they can, I don't think you believe in capitalism at all."

    Did you really mean to write that? I know some people think any objection to what a company does to make profits is an attack on capitalism itself, but you normally see that ignorant swill on the editorial pages of IBD. Is MF that dumb, too?

    Google has the right to do this, but if another company doesn't feel the need to be so piggish and compile user data across platforms (which is what's happening, there is no glass house) they have the right to promote that and offer themselves as an alternative for customers who don't like what Google is doing.

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