Why I think Google's new unified privacy settings make great business sense

There has been a heck of a lot of kerfuffle since Google announced in January that it was going to unify its privacy settings.

We are so used to getting social software for free that we are reluctant to pay for anything. But how does Google get its revenue?

By advertising.

And if Google does not specifically target users that click on adverts then its advertisers will go away. Google’s revenue will go down and it won’t have the cash to spend on R&D to innovate any further.

Which is fine if you are happy with that. The stock market however, will not be so happy.

Every advert that you clicked on Google’s search results page earns Google about $6.20 in revenue. It earns less for the adverts down the side, more for each ad on the top of search results.

Each time you click, you ensure Google gets continued revenue streams to create new products which are offered to you for free.

You do click on those ads don't you?

Clicking on those ads helps Google keep its products free. Advertisers pay, you benefit. Isn’t that what you want? You do prefer a streamlined service from Google after all?

Prefer to pay?

Would you complain if a new service, let’s say Google+ is offered as a pay as you go service? You might not be happy. You might not use the service.

Perhaps you would prefer to pay for Google software, following the software licencing model that Microsoft employs? Pay upfront, use the software for a fixed amount of time before it becomes obsolete. Get patches and security updates.

Then pay for the next version of the software.

Perhaps you would prefer to pay per search, or pay per software access. Would you rail against paying 10c for each search you do, or would you prefer to let the advertisers pay for Google innovation with ads targeted to you?

Social = free right? Just forget the hundreds of thousands of dollars needed to buy the hardware in the datacentres. Forget the salaries paid to enthusiasts and geeks who love coding and bringing new products to market. Let companies scrape by on a shoestring budget and not worry when hardware fails or becomes obsolete.

Remember how frustrated you were with Twitter’s ‘Fail Whale’. Twitter started out with a couple of servers under a desk in California. The free service and no advertising meant that there was no money to buy better servers and improve uptime until decent investment was secured.

Your choice

Remember, you explicitly created that Gmail account, so you could get early access to Google+. You created the YouTube account so you could comment and rate videos. You signed up for Google Reader, because you wanted the power of a good online RSS reader.

You signed up to access different Google software products. No one forced you to. You accepted the privacy terms when you signed up. You accepted the fact that the terms might change someday.

And Google is still not forcing you to sign up. It is your choice.

But if you do have more than one Google account, Google wants to mine the information that you have already willingly given it, to offer its customers, the advertisers, a better revenue stream.

There is nothing wrong with simplifying things, and simplifying privacy policies is a good idea.

If you really don’t like the idea of Google knowing so much about you then there are several things you can do. You can remove your data.

Delete your Gmail, Google reader, Google plus and Picasa account.

Don’t use Google search or Google maps.

Remember, you do not HAVE to use Google. You have a choice. There is always Bing, Hotmail, Facebook, Flickr, Bing maps -- and the iPhone of course.

Or you can put up with it..

Related content:

• Google's new privacy policy- The good, bad, scary
• Google's new privacy policy- Washington's misguided interrogation
• Be everywhere- Google’s real social strategy ZDNet
• Google gets more personal with 'Search plus Your World'