Google may be backing self-regulation in advance of widespread laws. This week, the company released a set of suggested principles for software makers to follow when writing programs that embed themselves on Internet users' PCs. The guidelines propose that an application should follow simple rules of politeness: it should admit what it's doing, permit itself to be disabled and not do sneaky things like leak personal information.
Yet even if it applies such best practices, Google could still land in hot water. Given that the company already has access to information about people's search histories and Web surfing behaviour and will do so about their email communications through its upcoming Gmail service, Google could take heat from privacy advocates and consumers.
The company already makes the Google Toolbar, Deskbar and other products for Windows that transmit some information about Web surfing behaviour back to its servers. Under proposed laws, these tools could be regulated, as would its upcoming ad-supported desktop search software.
"What's happened is that there's a trend of going from search to publishers to the desktop. After looking at the beginning of that market with Claria, the question is: how do you make it a consumer experience that they not only want, but also aren't offended by?" Highland's DeSilva said.
Those concerns over embedded software are unlikely to affect Microsoft, whose upcoming integrated search tools will probably be kept free from advertising.
Software challenges
Google also faces considerable hurdles in the technology side of desktop search.
"So many people equate search with Google, but in fact, there's an entirely different market for enterprise search software. And it is a complex problem to solve," said Sue Feldman, a vice president of content technologies research for IDC.
Google introduced an application for searching corporate intranets and desktop files two years ago. But the software makes up less than 5 percent of the company's business, or less than $48m last year, according to the company's IPO filing. While Google has a couple hundred enterprise customers, it hasn't been as successful in that sector as it has in search and advertising.
Google has become popular because it's helped to improve Web search by delivering fast, relevant results. But its formulas for the Web that rely on the link structure of Web pages are unlikely to translate well to the PC environment, as files and documents on the PC don't contain an inherent link structure.
