Out-Gagging Google

Outsmarting Google isn't easy. So on the issue of user privacy, Google's competitors are trying a different tactic: knowing less.

Microsoft (nasdaq: MSFT - news - people ) announced Monday that it's introducing new measures on its Live Search application that would erase identifying data from search logs 18 months after it's recorded and will allow users to surf sites with Microsoft-provided ads without having their behavior tracked.

Yahoo! (nasdaq: YHOO - news - people ) plans to make all search data anonymous after 13 months, according to a spokesman, and InterActiveCorp's (nasdaq: IACI - news - people ) Ask.com announced last week that it will be launching AskEraser, a search option that erases all history of Ask searches. Microsoft and Ask.com issued a joint statement over the weekend calling on members of the search industry to meet and discuss ways they can work together to define privacy principles and protect user information.

The wave of privacy announcements comes a month after Google (nasdaq: GOOG - news - people ) was lambasted in a report from Privacy International, which placed the search engine at the very bottom of its rankings for protection of private user information and labeled the company "hostile to privacy."

Google's plans to acquire the ad-serving company DoubleClick--which would combine an unprecedented volume of information about Web users' surfing behavior with Google's search data--have also drawn protests from a wide range of privacy groups in the U.S. and the European Union. E.U. government investigators and the Federal Trade Commission are both examining the consequences of a Google-DoubleClick deal, and the acquisition will be reviewed by Congress in the coming months.

All this spotlighting of privacy offers Google's competitors a chance to shorten Google's lead in the search industry, says Ben Edelman, an assistant professor at Harvard Business School. "Competing search engines struggle to figure out what they can offer users that Google can't," he says. "With Google's limited efforts to protect privacy, that's a clear area where other search engines can flex their muscles."

Peter Cullen, Microsoft's chief privacy strategist, says that Google's troubles were just one factor in the timing of their new privacy campaign. "We surveyed the landscape over the past couple of months relating to privacy search and ads, including the debate regarding Google and the E.U.," he says. "We decided it was time for us to provide a much more comprehensive package."

Ask.com would have the most to gain from competition with Google: In June, Ask had 5% of U.S. search market share, compared with Google's 49.5%, according to comScore Media Metrix. Yahoo! accounted for 25.1% of all searches, and Microsoft had 13.2%.

Despite criticisms over its privacy policies, Google is one of the few search engines that has yet to leak user data. In August 2006, AOL released the search records of 650,000 of its users--the data from a total of 20 million searches-- to the U.S. Department of Justice. And in January 2007, Microsoft, Yahoo!, and AOL offered up millions of search queries as part of an ACLU lawsuit seeking to overturn a federal pornography law. Google, by contrast, fought the subpoena on grounds of trade secrecy and avoided revealing user data.

But Google's increasing array of services creates an unprecedented collection of intertwined personal information, says Ben Edelman. Those applications now include online payment, video, mapping, e-mail, social networking, search and soon, DoubleClick's behavior-tracking advertising data. "They've built more and more services with increasingly fundamental privacy consequences," Edelman says. "The more attention these issues get, the more users will look at them and start to think it's a bit scary."

In response to Monday's announcement from Microsoft, Google's global privacy counsel Peter Fleischer offered a statement pointing out Google's decision in June to make user data anonymous after 18 months. "We hoped it would stimulate debate across the industry, and we're delighted that is has," he writes. "Debate and discussion are good for users. That's why we've made improvements to our policies over the last few months. We'll continue to do so in the future, and [we] look forward to working with other companies, regulators and others."

Ari Schwartz, a spokesman for the Center for Democracy and Technology, agreed that competition on privacy matters will likely benefit users. "The proof will be when the products actually roll out," says Schwartz, "But I think this has the potential to teach the industry that they're limited by consumer expectations about how their data will be collected. We haven't seen this kind of attention to privacy in a long time."