Few consumers are aware of the risks associated with
downloading apps from Google Play (NASDAQ:
In addition to the
that snuck into the store, it was recently revealed that Google
collects and sends
users' personal data
to app developers. That "personal data" includes (but
is not limited
to) the names, geographic region and e-mail addresses of those
who purchase apps.
Mark Little, a consumer analyst at Ovum, thinks that these and
other issues are creating a serious problem for Google.
"The latest slip, from Google Play this time, sees the
apparent passing of personally identifiable information to
developers without consumer permission," Little wrote in an
e-mail Wednesday. "Is this just another privacy violation to add
to the playlist, another fine to pay down like the consumer pays
a parking fine?
"Well yes, it is -- that's the point. It is this apparently
casual attitude to privacy infringement that is gradually
building a problem for the search giant. Privacy infringements
drive an endless media feed-back loop that slowly and invisibly
hardens consumers' attitudes against the betraying brand and
heats up the market for privacy services."
In the days following the privacy revelation, Ovum's Consumer
Insights survey found that 66 percent of respondents would block
tracking by a search engine if they could.
"Google [is] structured not to plan but just to innovate, to
act first and ask questions afterwards, a culture many companies
could do well to simulate, but a culture which can ignore
relationships and positive engagement with the consumer," said
Little. He added that if Google disrespects its customers they
It is a "lesson that Google and the Internet at large needs to
learn fast," he said.
On a less critical note, Little spoke fondly of Google's new
music streaming service, which is rumored to launch next
"[This is] an event that is sure to cause a major stir in the
offices of Spotify and Apple [(NASDAQ:
)]," said Little. "If Google can negotiate a deal that embeds the
new service in Android and fully leverages other assets, most
importantly You Tube, then the Internet prime has the potential
to take a significant slice of the $5.6 billion digital music
market as well as make a dent in Spotify and Apple iTunes
That said, Little outlined a number of barriers that Google
must "work hard to resolve," such as the fear that record labels
may not want to work with another company that could become as
powerful as Apple.
"It remains to be seen how a Google branded subscription
service will be viewed by a digital population increasingly wary
of the company's handling of its personal data," said Little.
"Given the length of past negotiations with Apple and Spotify,
the launch of a fully thought through Google music streaming
proposition in September might be a little optimistic."
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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