Some time ago, Web search giant Google (GOOG) realized that its "Don't be evil" public image needed to be regularly burnished with policymakers and the public.
Google is routinely listed as one of the world's most admired companies. But in today's volatile business climate, with disasters rocking respected corporations, it's clear that even the most admired firms are one PR debacle away from public wrath and official scrutiny.
Just a few years ago, Toyota (TM) was widely respected for its auto quality and and Goldman Sachs (GS) was held out as the gold standard of integrity on Wall Street. After British Petroleum changed its name to BP and began using the tagline "Beyond Petroleum," the company (somehow) gained a reputation as the most forward-thinking among its oil giant peers. That was before it turned the Gulf of Mexico into a giant oil slick.
Even iPhone-maker Apple (AAPL), revered around the world for amazing products, has become something of bogeyman of late -- a symbol of a closed, sanitized vision of the Internet controlled by a single company. And then of course there's Facebook, which has never been particularly admired -- at least by anyone familiar with its origins -- and is now going through PR hell over its privacy practices.
We're Not Evil. Really.
More than most other companies, Google requires a level of user trust -- as we speak, millions of people are searching for things on Google they would never discuss with their spouses, yet they feel comfortable sharing those queries with a giant corporate database.
From the beginning, Google's founders made it clear that they intended to build a company that wasn't "evil." And over the years, the company has garnered praise for its philanthropic efforts, as well its support for open platforms, net neutrality, and most recently, its stand against Chinese censorship.
Google freely gives away software tools that Microsoft used to charge for and is perceived as standing up against the big, bad cable and telecom companies. And 600 towns expressed interest after Google said it would build a super-fast broadband network that could wire an entire city.
Google's Economic Impact
Over time, Google has built a significant reservoir of goodwill. But that reservoir must be tended to -- regularly. All of this is by way of setting up a new report Google released Tuesday touting its economic impact around the country.
"In our report, we're announcing that in 2009 we generated a total of $54 billion of economic activity for American businesses, website publishers and non-profits," Google said in a self-congratulatory blog post Tuesday. "In a time of tighter budgets and a slow economic recovery, we're glad to support so many small businesses and entrepreneurs across the country by helping them find new customers more efficiently and monetize their websites through targeted advertising."
"We conservatively estimate that for every $1 a business spends on AdWords, they receive an average of $8 in profit through Google Search and AdWords," Google said in the report, which provided a state-by-state breakdown including $14 billion in California, $6 billion in New York, $3.2 billion in Illinois, and $1.4 billion in New Jersey.
The report is clearly designed to buff Google's image and send a message to politicians, who only need to read the report to get a sense of how important Google is to their state. Simply put, it's in Google interest that it be viewed as a good citizen. The company is attracting more regulatory scrutiny by the week, and only narrowly skated by the Federal trade Commission, which had expressed concern about its $750 million acquisition of AdMob.
More urgently, Google is facing a rising outcry over its disclosure that it improperly collected users' WiFi data during its "Street View" project for Google Maps. On Monday, an Australian official called the incident, "probably the single greatest breach in history of privacy." Last week, Google co-founder Sergey Brin acknowledged that his company "screwed up."
Google has been working on the study for over six months and it clearly took time to put together. I find it entirely plausible that the report was scheduled to be released well before the WiFi controversy erupted. This week is, after all, National Small Business Week.
But John Simpson, who has a budget of $200,000 annually to lob colorful PR grenades in Google's direction from a Santa Monica-based group called Consumer Watchdog, called the report "self-serving hype."
Simpson is paid to jump on Google at every turn. I think a more level-headed assessment comes from CNET's Declan McCullagh -- no Google fanboy, to be sure -- who quipped, "While the title of the online report is 'Google's Economic Impact 2009,' it could well have been called 'Google's Political Impact 2010.'"
"If Nevada Sen. Harry Reid is wavering before a key vote, it might be handy for the company's lobbyists to be able to show that Google counts 17,000 Nevada advertisers and publishers as partners, and generated $509 million in economic activity for the Silver State last year," McCullagh wrote.
There is no doubt that Google has generated an huge amount of business for companies -- small and large -- around the world. There's no doubt that its support for free and open software is to be commended. And there's no doubt that the company has unlocked and democratized a mind-boggling amount of information.
But if Google keeps trying to convince people that it isn't evil, folks may begin to wonder whether the company doth protest a little too much.
Introduction to Value Investing
Are you the next Warren Buffett?View Course »