FUROR ERUPTS OVER NET NEUTRALITY RULES

Original Story:  USAToday.com

A battle has erupted over the Federal Communications Commission chairman's new proposal for net neutrality rules that would allow content providers to pay for Internet express lanes.

In the first formal step toward reinstating net neutrality, FCC Chairman Tom Wheeler presented a draft of the revised rules to his fellow commissioners Thursday. The rules would prevent Internet service providers from blocking or discriminating against lawful content.

But the proposal allows fast lanes to consumers' homes, the so-called "last mile," that content providers such as Netflix can purchase as long as the same opportunities are available to others on "commercially reasonable" terms. The new rules give the FCC the authority to review such arrangements to ensure that they don't harm consumers and competition.

Critics of the new approach immediately asserted that fast lanes are a form of discrimination that could leave small businesses and entrepreneurs at a disadvantage. The FCC should include specific language to prevent such deals, or ISPs should be classified as public utilities that can be regulated more strictly, they say.

"Net neutrality prevents that overcharge, which gets passed along to consumers and stifles innovation," says Gabe Rottman of the American Civil Liberties Union.

Net neutrality proponents were also concerned that the new rules do not address traffic over the back-end Internet pipes used by content providers to send data to ISPs' front doors.

Netflix caused an industry furor earlier this year when it agreed, albeit reluctantly, to pay Comcast for a more direct connection between its servers and Comcast's network to provide faster delivery. "Where they are headed with this is down the wrong path, as ISPs get explicit legal permission to do deals with Internet companies," says Netflix spokesman Joris Evers.

The FCC's Open Internet rules were enacted in 2010 to ensure that Internet providers do not discriminate against lawful content. Following an industry challenge, a federal appeals court invalidated the rules earlier this year but allowed the FCC to recast them.

Wheeler said his goal is to enact rules similar to the earlier ones that pass muster with the court. The commission will vote on them at the agency's May 15 meeting. If they are approved, public comment will be taken before the rules go into effect, which Wheeler hopes will be by the end of the year.

APPLE'S IPAD IN BIG TROUBLE

Original Story: USAToday.com

Less than two years ago, Apple's (ticker: AAPL) iPad absolutely dominated the tablet space. As of mid-2012, Apple still claimed nearly 70% of the tablet market, while Android tablet manufacturers were struggling to make any headway.

Furthermore, the iPad Mini's fall 2012 arrival was an open secret by then. As a result, tablet market analysts expected Apple to further solidify its dominance of the tablet market over time.

However, the opposite has occurred. Not only has Apple's market share lead crumbled, but iPad sales growth has also come to a crashing halt. Tablet rivals such as Amazon.com (AMZN) and Samsung are gaining momentum by closing the quality gap with Apple and offering lower price points. Unless Apple can deliver vastly improved iPads later this year, the iPad's growth days are over.

Where did all the iPad buyers go?

It's hard to imagine right now, but just two years ago, Apple was growing iPad revenue by more than 60% and iPad unit sales by 80% -- even without an entry in the growing 7- and 8-inch tablet market! Last year, despite the addition of the iPad Mini, unit sales growth slowed to 22%.

Furthermore, Apple introduced the iPad Mini at a lower price point to combat cheap tablets from Amazon.com and other vendors. This led to a sharp drop in the average iPad selling price. As a result, iPad revenue grew only 3% in FY13. While iPad production costs are falling, it's safe to say that with iPad unit sales growth outpacing revenue growth 22% to 3%, iPad margins dropped dramatically.

iPad revenue growth did tick up to 7% last fall on a 14% increase in unit sales. However, that may prove to be Apple's best quarter of the new fiscal year. Demand appears to have fallen off a cliff after the holiday season.

As of Dec. 28 -- the last day of Apple's fiscal Q1 -- the iPad Air and iPad Mini Retina combined to account for 8.6% of all iPad usage, according to Fiksu. By the last day of Q2, usage for the new iPads had grown to 14.1% of the total, a 5.5 percentage point increase.

Considering that Apple benefited from "channel fill" in Q1 -- selling the new iPads to build up inventory at third-party retailers -- iPad unit sales could easily have fallen 40% sequentially this quarter. That would entail a significant step backward from Apple's 19.5 million iPad sales in Q2 last year, when Apple was meeting pent-up demand for the original iPad Mini.

The iPad Mini Retina is a flop

If I had to boil down Apple's iPad problems to a single issue, it's that the new iPad Mini Retina is a flop. After five months on the market, the iPad Mini Retina accounts for just 3.7% of all iPad usage (as of Thursday). By contrast, the third-generation iPad (the first to offer a Retina display) still accounts for 13.6% of iPad usage, even though it was on the market for less than eight months in 2012.

To some extent, weak sales of the iPad Mini Retina could be the result of a crowded iPad market. For just $100 more, tablet buyers can get a whole lot of extra screen real estate with the iPad Air. Alternatively, the original iPad Mini is $100 cheaper and offers "good enough" specs for many users.

However, there's also a quality issue. To be sure, the iPad Mini Retina has gotten good reviews from some respected publications. That said, many reviewers have found that Amazon's Kindle Fire HDX offers a much higher-quality display than the iPad Mini Retina.

This is a big problem for Apple, which spent most of 2012 training consumers to demand high-quality Retina displays for their mobile devices. Not only is Amazon offering lower price points -- the Kindle Fire HDX starts at $229 for the 7-inch version and $379 for the 8.9-inch version -- but it's also offering better quality on at least one critical feature.

Will Apple reclaim the lead?

In some respects, Apple's commanding lead in the tablet market remains intact. There are far more iPad-optimized apps than tablet-optimized Android apps. Even though Apple's technical lead has shrunk (or disappeared, perhaps), it still offers a superior overall user experience. That's a major reason iPad usage still dwarfs usage of all other tablets combined.

The iPad can still be a meaningful contributor to Apple's profitability even if sales growth remains small. As long as engagement remains high and the installed base of iPads increases, Apple can take a page out of Amazon.com's playbook by making money while people use their iPads: by selling apps, books, movies, and so on.

Indeed, strong iPad usage is undoubtedly one of the factors driving big gains in Apple's revenue from iTunes and the App Store. This revenue stream will become increasingly important to Apple's earnings in the next few years. However, what Apple shareholders really want to see is a return to solid sales growth for the iPad -- even if it continues losing market share.

Apple needs to double down on display quality if it wants to reignite iPad sales growth.

To reignite iPad sales growth, Apple may need to become somewhat more aggressive on pricing for the iPad Mini Retina. More importantly, it needs to make the display at least as good as what Amazon and other competitors are offering (and preferably better). Adding a faster processor and a fingerprint sensor may help sales a bit, but improving the display is the X-factor.

Foolish final thoughts

While I remain bullish about Apple's long-term prospects, the iPad no longer appears to be a major part of the Apple growth story -- aside from its role in driving content and app sales. iPad sales have stagnated in the last year, and the introduction of two new iPads last fall provided only a modest short-term sales bump.

To reverse this discouraging trend, Apple needs to double down on its pursuit of perfection for the next iPad Mini. If Apple can deliver an updated iPad Mini Retina with a best-in-class display this fall, it could rejuvenate iPad sales, especially if Apple can lower the price. Otherwise, investors may need to look to other product lines for long-term growth.

GOOGLE, ONCE DISDAINFUL OF LOBBYING, NOW A MASTER OF WASHINGTON INFLUENCE

Original Story: WashingtonPost.com

 In May 2012, the law school at George Mason University hosted a forum billed as a “vibrant discussion” about Internet search competition. Many of the major players in the field were there — regulators from the Federal Trade Commission, federal and state prosecutors, top congressional staffers.


What the guests had not been told was that the day-long academic conference was in large part the work of Google, which maneuvered behind the scenes with GMU’s Law & Economics Center to put on the event. At the time, the company was under FTC investigation over concerns about the dominance of its famed search engine, a case that threatened Google’s core business.

In the weeks leading up to the GMU event, Google executives suggested potential speakers and guests, sending the center’s staff a detailed spreadsheet listing members of Congress, FTC commissioners, and senior officials with the Justice Department and state attorney general’s offices.

“If you haven’t sent out the invites yet, please use the attached spreadsheet, which contains updated info,” Google legal assistant Yang Zhang wrote to Henry Butler, executive director of the law center, according to internal e-mails obtained by The Washington Post through a public records request. “If you’ve sent out the invites, would it be possible to add a few more?”

Butler replied, “We’re on it!”

On the day of the conference, leading technology and legal experts forcefully rejected the need for the government to take action against Google, making their arguments before some of the very regulators who would help determine its fate.

The company helped put on two similar conferences at GMU around the time of the 18-month investigation, part of a broad strategy to shape the external debate around the probe, which found that Google’s search practices did not merit legal action.

The behind-the-scenes machinations demonstrate how Google — once a lobbying weakling — has come to master a new method of operating in modern-day Washington, where spending on traditional lobbying is rivaled by other, less visible forms of influence.


That system includes financing sympathetic research at universities and think tanks, investing in nonprofit advocacy groups across the political spectrum and funding pro-business coalitions cast as public-interest projects.

The rise of Google as a top-tier Washington player fully captures the arc of change in the influence business.

Nine years ago, the company opened a one-man lobbying shop, disdainful of the capital’s pay-to-play culture.

Since then, Google has soared to near the top of the city’s lobbying ranks, placing second only to General Electric in corporate lobbying expenditures in 2012 and fifth place in 2013.

 The company gives money to nearly 140 business trade groups, advocacy organizations and think tanks, according to a Post analysis of voluntary disclosures by the company, which, like many corporations, does not reveal the size of its donations. That’s double the number of groups Google funded four years ago.

This summer, Google will move to a new Capitol Hill office, doubling its Washington space to 55,000 square feet — roughly the size of the White House.

Google’s increasingly muscular Washington presence matches its expanded needs and ambitions as it has fended off a series of executive- and legislative-branch threats to regulate its activities and well-funded challenges by its corporate rivals.

Today, Google is working to preserve its rights to collect consumer data — and shield it from the government — amid a backlash over revelations that the National Security Agency tapped Internet companies as part of its surveillance programs. And it markets cloud storage and other services to federal departments, including intelligence agencies and the Pentagon.

“Technology issues are a big — and growing — part of policy debates in Washington, and it is important for us to be part of that discussion,” said Susan Molinari, a Republican former congresswoman from New York who works as Google’s top lobbyist. “We aim to help policymakers understand Google’s business and the work we do to keep the Internet open and spur economic opportunity.”

Molinari added, “We support associations and third parties across the political spectrum who help us get the word out — even if we don’t agree with them on 100 percent of issues.”
 As Google’s lobbying efforts have matured, the company has worked to broaden its appeal on both sides of the aisle. Executive Chairman Eric Schmidt is a well-known backer of President Obama and advises the White House. Google’s lobbying corps — now numbering more than 100 — is split equally, like its campaign donations, among Democrats and Republicans.

Google executives have fostered a new dialogue between Republicans and Silicon Valley, giving money to conservative groups such as Heritage Action for America and the Federalist Society. While also supporting groups on the left, Google has flown conservative activists to California for visits to its Mountain View campus and a stay at the Four Seasons Hotel.

The company has also pioneered new and unexpected ways to influence decision-makers, harnessing its vast reach. It has befriended key lawmakers in both parties by offering free training sessions to Capitol Hill staffers and campaign operatives on how to use Google products that can help target voters.

Through a program for charities, Google donates in-kind advertising, customized YouTube channels and Web site analytics to think tanks that are allied with the company’s policy goals.

Google “fellows” — young lawyers, writers and thinkers paid by the company — populate elite think tanks such as the Cato Institute, the Competitive Enterprise Institute and the New America Foundation.

To critics, Google’s investments have effectively shifted the national discussion away from Internet policy questions that could affect the company’s business practices. Groups that might ordinarily challenge the policies and practices of a major corporation are holding their fire, those critics say.

“Google’s influence in Washington has chilled a necessary and overdue policy discussion about the impact of the Internet’s largest firm on the future of the Internet,” said Marc Rotenberg, a Georgetown University law professor who runs the Electronic Privacy Information Center, a watchdog and research organization.

Some with deep ties to the company say that Google’s embrace of aggressive lobbying was a necessary concession to the realities of Washington.

“I don’t fault Google for playing that game, in which big companies use their money to buy advocates and allies,” said Andrew McLaughlin, who served as Google’s first director of global public policy in Washington. “Given where the company is today, the fiduciary duty it has to shareholders and the way Washington works, it’s a rational judgment.”

Google goes to lunch

An early sign of Google’s new Washington attitude came in September 2011, when executives paid a visit to the Heritage Foundation, the stalwart conservative think tank that has long served as an intellectual hub on the right, to attend a weekly lunch for conservative bloggers.

The session took place at a critical juncture for the company.

Days earlier, Schmidt had endured a rare and unnerving appearance on Capitol Hill, where he was lectured by a Republican senator who accused the company of skewing search results to benefit its own products and hurt competitors. The FTC antitrust inquiry was underway. And, in what Google saw as a direct threat to the open Internet, major lobbies such as the U.S. Chamber of Commerce and the Motion Picture Association of America were mounting a legislative campaign to place restrictions on the sale of pirated music and movies. The effort was getting bipartisan traction in the House and the Senate.
 Inside Google’s Washington headquarters, a handful of lobbyists were crafting what they called the “Republican strategy” to defeat the legislation. Their approach: build conservative opposition based on the right’s distaste for regulation. They also seized on an obscure provision that they told Republicans would be a boon for trial lawyers, a Democratic constituency.

As the campaign took shape, there was a building sense within the company that it needed to beef up its firepower on the Hill. That fall, Google’s first Washington lobbyist, a computer scientist and lawyer named Alan Davidson, a Democrat, would announce his resignation, replaced a few months later by the former GOP lawmaker, Molinari.

In their visit to Heritage that day, Google officials were eager to make new friends. Their challenge was instantly clear.

“In 2008, your CEO campaigned for Barack Obama,” said Mike Gonzalez, Heritage’s vice president for communications, according to a video of the event. “.?.?. As a company, you’re really identified with this administration from the beginning. And you come here and you’re like a mix of Milton Friedman and Friedrich Hayek.”

Adam Kovacevich, then a member of Google’s policy team, responded by stressing the company’s interest in building new alliances.

“One of the things we’ve recognized is that no company can get anything done in Washington without partnerships on both sides of the aisle,” he said.

He noted the recent hiring of Lee Carosi Dunn, one of several former top aides to Sen. John McCain (R-Ariz.) brought on by the company.

Dunn, addressing the audience, promised “a lot of reach-out to Republicans.”

“I think it’s another lesson young companies that come to Washington learn — you can’t put all your marbles in one basket,” Dunn said. Referring to the editor of the conservative Weekly Standard, Dunn added: “Look, even Bill Kristol was walking around wearing Google glasses. We’re making strides!”
 The Google-Heritage relationship soon blossomed — with benefits for both.

A few weeks after the blogger session, Heritage researcher James L. Gattuso penned a critique of the antitrust investigation into Google, praising the company as “an American success story.”

That winter, Heritage joined the chorus of groups weighing in against the anti-piracy legislation. As the bill, the Stop Online Piracy Act, appeared to gain steam in the GOP-led House, Gattuso wrote a piece warning of “unintended negative consequences for the operation of the Internet and free speech.” The legislation, he said, could disrupt the growth of technology. Gattuso said he came to his position independently and was not lobbied by Google.

After Gattuso’s piece went live, Heritage Action, the think tank’s sister advocacy organization, quickly turned the argument into a political rallying cry. In terms aimed at tea party conservatives, the group cast the bill as “another government power grab.”

In mid-January 2012, Heritage Action designated the legislation a “key vote” it would factor into its congressional race endorsement decisions — heightening the pressure on Republicans.

The next day, leading Internet sites, including Wikipedia, went dark as part of an online blackout protesting the bills.

Google turned its iconic home page into a political platform for the first time, urging users to sign a petition against the legislation. Seven million people added their names, and many of them added their e-mails, creating a valuable activist list for Google to mobilize then and in later fights.

As congressional offices were flooded with phone calls and e-mail protests, support for the legislation crumbled. Within days, both the House and Senate versions of the bill were shelved and Hill veterans were left marveling at the ability of Google and its allies to muster such a massive retail response.

For Google and Heritage, the legislative victory was the beginning of a close relationship. A few months later, Google Ideas and the Heritage Foundation co-hosted an event focused on the role the Internet could play in modernizing Cuba, featuring Sen. Marco Rubio (R-Fla.) and Google Ideas director Jared Cohen.

The following year, a new name popped up on Google’s list of groups it supports financially: Heritage Action.

 GMU conferences

Facing a broad and potentially damaging FTC probe, Google found an eager and willing ally in George Mason University’s Law & Economics Center.

The center is among the academic programs at universities such as Harvard and Stanford that have benefited from Google’s largesse. For the past several years, the free-market-oriented law center has received an annual donation from the company, a grant that totaled $350,000 last year, according to the school.

Google’s relationship with the law center proved helpful in the summer of 2011 as speculation mounted that the FTC was going to launch an antitrust investigation of the tech giant. The company’s rivals, including Microsoft and Yelp, were aggressively pressing arguments that Google was exploiting its dominance in the search business.

On June 16, 2011, Google and the law center put on the first of three academic conferences at the GMU law school’s Arlington County campus, all focusing on Internet search competition. It was eight days before the company announced it had received formal notification it was under FTC investigation.

Google was listed as a co-sponsor of the day-long forum, but some participants were still struck by the number of speakers who took a skeptical view of the need for antitrust enforcement against the company, according to people in attendance.

The keynote address was by Google engineer Mark Paskin, who delivered a lunchtime speech titled “Engineering Search.”

A few days later, Christopher Adams, an economist in the FTC’s antitrust division who later worked on the Google investigation, e-mailed Butler, the law center’s director, to thank him for putting on the conference. “I think it was one of the best policy conferences that I’ve been too [sic],” Adams wrote, praising Paskin’s talk as “excellent.”

Adams declined to comment for this article, referring questions to the FTC press office.

FTC spokesman Justin Cole said the agency’s staffers “are required to adhere to established federal government ethics rules and guidelines. Attendance and participation in the 2011 and 2012 GMU conferences by our staff adhered to these guidelines.”

As the agency’s investigation stretched into its second year, the staff and professors at GMU’s law center were in regular contact with Google executives, who supplied them with the company’s arguments against antitrust action and helped them get favorable op-ed pieces published, according to the documents obtained by The Post.

The school and Google staffers worked to organize a second academic conference focused on search. This time, however, Google’s involvement was not publicly disclosed.

Months before the event, Zhang, the Google legal assistant, e-mailed Chrysanthos Dellarocas, a professor in the Information Systems Department at Boston University’s School of Management, to suggest he participate. Dellarocas had received $60,000 in 2011 from Google to study the impact of social networks on search.

“We’d love for you .?.?. to submit and present this paper, if you are interested and willing,” she wrote.

When GMU officials later told Dellarocas they were planning to have him participate from the audience, he responded that he was under the impression from “the folks at Google who have funded our research” that they wanted him to showcase his work at the event. He said he wanted “to be in compliance with our sponsor’s expectations.”

Dellarocas, who had a schedule conflict and ultimately did not attend, told The Post that while Google occasionally checked on his progress, the company did not have any sway over his research.

“At no point did they have any interference with the substance of my work,” he said.

Even as Google executives peppered the GMU staff with suggestions of speakers and guests to invite to the event, the company asked the school not to broadcast its involvement.

“It may seem like Google is overwhelming the conference,” Zhang fretted in an e-mail to the center’s administrative coordinator, Jeffrey Smith, after reviewing the confirmed list of attendees a few weeks before the event. She asked Smith to mention “only a few Googlers.”

Smith was reassuring. “We will certainly limit who we announce publicly from Google,” he replied.

A strong contingent of FTC economists and lawyers were on hand for the May 16, 2012, session, whose largely pro-Google tone took some participants aback. “By my count, out of about 20 panelists and speakers, there were 31 / 2 of us who thought the FTC might have a case,” said Allen Grunes, a former government antitrust lawyer who served on a panel and described the conference as “Google boot camp.” Grunes said he was not aware of Google’s role organizing the event until informed of it by a Post reporter.

Daniel D. Polsby, dean of GMU’s School of Law, which houses the center, said that while Google provided suggestions, the agenda and speakers were determined by university staffers. “I think it would misrepresent this conference to suggest that it was a Google event,” he said, adding that the law center discloses on its Web site the support it gets from Google and other corporations.

Google declined to comment about the conferences.

In January 2013, after an investigation that spanned more than a year and a half, the FTC settled the case with Google, which agreed to give its rivals more access to patents and make it easier for advertisers to use other ad platforms.

But when it came to the charges that Google biased its search results to promote its own products, the five FTC commissioners all voted to close the investigation, saying there was no evidence the company’s practices were harming consumers.

Jon Leibowitz, then the chairman of the agency, said in an interview that the FTC was not affected by Google’s campaign, noting that the company’s rivals were waging a parallel effort on the other side.

“It didn’t bother me that a lot of people were building events around the possibility of the FTC investigation,” said Leibowitz, who has since left the FTC. “That’s sort of life in the big city, and both sides were doing it.”

 NSA fallout

On a February night this year, Schmidt sat down with a Washington audience far friendlier than the panel of senators who had grilled him nearly three years earlier. Addressing a dinner of journalists and scholars at the libertarian Cato Institute, Schmidt received applause and lots of head-nodding as he declared, “We will not collaborate with the NSA.”

Cato was not always in sync with Google’s policy agenda. In previous years, the think tank’s bloggers and scholars had been sharply critical of the company’s support for government rules limiting the ways providers such as Comcast and Verizon could charge for Internet services.

But, like many institutions in Washington, Cato has since found common ground with Google.

And the think tank has benefited from the company’s investments, receiving $480,000 worth of in-kind “ad words” from Google last year, according to people familiar with the donation.

Schmidt’s message to Cato that night in February reflected the current focus of Google’s energy — containing the fallout from revelations by NSA leaker Edward Snowden.

As the public’s outrage has grown, the tech giant has tried to keep the focus on limiting government surveillance, not on the data collection done by private companies. A White House review of those issues is expected to be released this coming week.

A campaign against government spying, meanwhile, is in high gear, drawing together some unexpected bedfellows. The American Civil Liberties Union, Heritage Action, Americans for Tax Reform and the Center for Democracy & Technology have formed a coalition calling for the government to obtain a probable-cause warrant before getting access to e-mails and other electronic data.

The coalition, Digital 4th, is funded by Google.

TOO BIG TO TRUST? GOOGLE'S GROWING CREDIBILITY GAP

Original story: InfoWorld.com

Remember when we all loved Google? Its search engine was both simple to use and an unbiased portal to anything you wanted to know. It was founded by two college students at a time when Silicon Valley was a shining beacon of what was right in the world, during sunny economic and political times.

We don't love Google so much any more, mainly because we trust it less and less. More and more people have realized that the Google search engine is hugely biased in favor of advertisers, and the results are increasingly manipulated by Google for inscrutable purposes. Google seems to track anything and everything we do -- it peruses our emails, our files stored on its servers, our locations, and our chats. Americans are getting nervous.

When Google bought smart thermostat maker Nest earlier this year, the public recoiled -- Nest owners didn't want their thermometers to be the latest spying portal in their homes for Google to use. That negative reaction drove home the growing Google trust problem. Likewise, no one really believed that Google wasn't participating in the NSA's spying on users; it seemed a clear case of the lady doth protest too much. Plus, we saw how much Google is spying on us, whether or not in support of the NSA. If anything, Google's response seemed to be indignation that the NSA was piggybacking on Google's own privacy-mining efforts.

For most people, Google is still a shining star. It ranks as the second-most valuable brand in the world, after Apple and before Coca-Cola, a ranking that has grown in recent years. It's also at the top of the rankings for best places to work. It's not as if Google has yet become Facebook, whose abuse of personal information is assumed. But the cracks in Google's reputation are growing.

Consider Google's recent policy update for the Google Play Store, which is where you get Android and Chrome OS apps. The latest policies forbid apps that mislead users into buying add-ins, releasing their personal data, or going to websites -- common techniques for dubious advertisers and vendors, as well as cyber criminals.

But will Google enforce these policies? Google didn't respond to InfoWorld's query on the matter, but its past actions suggest it will not, other than occasionally as a sort of spring cleaning. Google has long had a hands-off approach to apps, doing little to weed out malware and other abusive apps. It trusted app makers to do the right thing.

Ironically, Google's own search engine would fail some of those new Play Store policies -- you can't always tell what search-result links you click are sponsored versus neutral, and many of the advertised links lead to scam sites that surreptitiously steal user information. Google also plays games with the unsponsored search results, favoring content from people and organizations with active Google+ accounts, for example. Google Search and the Play Store are becoming more and more like Craigslist, the pioneering, once-virtuous online classified-ads system that now is a seedy venue favored by scammers for finding new victims.

The reality is that Google's business is and has always been about mining as much data as possible to be able to present information to users. After all, it can't display what it doesn't know. Google Search has always been an ad-supported service, so it needs a way to sell those users to advertisers -- that's how the industry works. Its Google Now voice-based service is simply a form of Google Search, so it too serves advertisers' needs.

In the digital world, advertisers want to know more than the 100,000 people who might be interested in buying a new car. They now want to know who those people are, so they can reach out to them with custom messages that are more likely to be effective. They may not know you personally, but they know your digital persona -- basically, you. Google needs to know about you to satisfy its advertisers' demands.

Once you understand that, you understand why Google does what it does. That's simply its business. Nothing is free, so if you won't pay cash, you'll have to pay with personal information. That business model has been around for decades; Google didn't invent that business model, but Google did figure out how to make it work globally, pervasively, appealingly, and nearly instantaneously.

I don't blame Google for doing that, but I blame it for being nontransparent. Putting unmarked sponsored ads in the "regular" search results section is misleading, because people have been trained by Google to see that section of the search results as neutral. They are in fact not. Once you know that, you never quite trust Google search results again. (Yes, Bing's results are similarly tainted. But Microsoft never promised to do no evil, and most people use Google.)

The issue gets trickier when you move away from search and into apps, whether Chrome OS or Android. Free apps are what people want, so app makers end up doing the same data-mining that sustains Google Search, using a shadowy network of companies to do the work for them. The result is that many mobile apps have the same kind of scams you see on the Web. Sometimes Google is in that mix (innocently, or at least not looking too hard), sometimes it is not. That's why opt-in permissions and clear disclosure are necessary -- so you don't feel fooled.

But many paid apps use these same services to increase their income -- you may think by paying for the app or an in-app extension, your data and behavior are not being mined. But they often are, typically without your knowledge. That's extra income for the app maker, as well as the data miners they work with. Or it supports an artificially low price that drew your interest in the first place. If a deal seems too good to be true ...

Google is hardly alone in plying this murky data-mining trade. But it's the largest visible company in that business, so it's an easy, obvious target for distrust -- and user wrath. Many of us have given up on Facebook ever being honest, so we're looking at Google as the next line to hold.

Also, Google was a very optimistic, idealistic company in its youth. It really did want to change the world for the better, and it believed in freeing information for all as a way to empower individuals. It believed its early "do no evil" motto. It really did see Android as a way to democratize smartphones, which until then were the province of the well-to-do who could afford BlackBerrys or iPhones. Yes, making Android freely available also created a large footprint for Google's services, so its moves were hardly selfless -- but they were oriented toward doing greater good while making money, a virtuous business approach.

Google employees still believe that's how their company works: a force for good that harmlessly uses personal data to both help individuals and make money that supports its many activities and innovations.

But as time goes on, the mercantile needs are coloring the do-gooder impulses. Google is a public company, and it has to satisfy shareholders' desire for profits every quarter. That creates a tension between its reputation and its economic reality. By sweeping that tension under the rug, Google only creates a place for distrust to grow. We can all see that the old Google is not the current Google, and the pretense that it is only heightens our suspicions.

It's time for Google to admit what it does and to act consistently on its policies (or withdraw policies it doesn't intend to enforce). That honesty will help stem the loss of trust. People know that companies exist to make money, but they need to know the true relationship they're entering and don't end up feeling misled. We all know the promises that the banks, airlines, insurance companies, cellular providers, and cable companies make aren't real, and they routinely mislead us on pricing and services -- so we don't trust them. Does Google really want to be like those industries?

Trust comes from honesty, and the key to honesty is to be forthright. Google doesn't seem to understand that yet.

44% OF TWITTER'S 982 MILLION ACCOUNTS NEVER USED

Original Story: BizReport.com

The number of people who created a Twitter account and never used it is significant, according to third-party site Twopcharts that monitors Twitter activity. They report that 44% of Twitter's 982 million accounts have never seen any action - not even a single Tweet.

Even among the 550 million or so accounts that have seen activity a significant number, 43%, haven't seen any activity in more than a year.

Furthermore, less than half (47%) of all accounts have added a profile image and even less, 24%, have added a profile description. Just 30% of all users have created just 1 to 10 Tweets and only 13% of registered users have more than 100 Tweets under their belt.

However, as Twopcharts told the Hindustan Times, the 44% of users than have never sent a Tweet doesn't mean that those accounts are dormant as those users may still be using the social platform to read timelines and stay informed.

Businesses and brands that establish a Twitter presence and fail to maintain it to engage with consumers are playing a 'dangerous game' according to Eptica's Olivier Njamfa commenting on his recent research into customer contact channels.

"This could well backfire, leading to negative feedback spreading through the social network and damaging their overall brand," he said.