Is Google Burning Its Brand? [UPDATED]

Google’s motto may be “Don’t do evil,” but a recent attempt to defund a non-profit critic, suggests that “See no evil” and “Hear no evil” might be appropriate as well. Add other actions that have raised the eyebrows of critics, and experts think that the company is tarnishing its brand.

The recent incident involved a privacy group called Consumer Watchdog. The organization and Google have had a history of run-ins. Consumer Watchdog has been critical of Google in terms of privacy, and has been aggressive at times in publicly challenging the search giant, as can be seen in this video ironically documented on YouTube, which is owned by Google:

On Feb. 23, Consumer Watchdog issued a press release claiming that Bob Boorstin, Google’s director of corporate and policy communications, attempted to get a foundation to stop giving money in the future to the organization. Boorstin admitted to the incident and issued what sounded like a half-hearted apology.

The public relations problem is the bold statement made by Google’s code of conduct:

The Google Code of Conduct is one of the ways we put “Don’t be evil” into practice. It’s built around the recognition that everything we do in connection with our work at Google will be, and should be, measured against the highest possible standards of ethical business conduct. We set the bar that high for practical as well as aspirational reasons: We hire great people who work hard to build great products, and it’s essential that we build an environment of trust - among ourselves and with our users. That trust and mutual respect underlie our success, and we need to earn it every day.

This isn’t the first time that Google’s behavior has attracted criticism for not meeting the company’s own stated standards. And the scanning of books still in copyright not only led to negative publicity, but a class action law suit that was recently settled.

[UPDATE: Giving top execs bonuses when the holiday payments to employees had been slashed might add more fuel to the fire.]

Not everyone is concerned. For example, Cale Smith, a managing partner of Islamorada Investment Management, whose Tarpon Fund is invested in Google, says:

It is Google’s competitive advantages that enhance the value of its brand and mantras, not the other way around.

To marketers, “brand” represents part of the value a product brings to its users. Analysts, however, shouldn’t tolerate that kind of ambiguity, and the good ones think of a brand as an asset, just like any other. The value of a brand is equal to whatever it costs to reproduce it, and no more - no different than equipment on the balance sheet. Real value comes from a company’s competitive advantage. In Google’s case, that is the company’s massive scale of search queries and clicks.

The “don’t do evil” mantra may be a key element of the perceived value of Google, but by itself it does not create any of the advantages investors should be looking for.

Many branding and marketing experts would disagree, and some suggest that Google is potentially alienating customers and hurting its positioning. “If brands aren’t delivering on their core values, consumers are going to sniff them out,” says Matt McRoberts, managing director at integrated marketing firm Iris. “Now it’s easier than ever [for displeased consumers and others] to rally against a brand like that.”

“Google’s core offering is about information being free,” says Dave Anolik, chief creative officer for Quango, a design and marketing firm. “Here they are acting to limit the democratic forces that they promote in areas of its core brand messaging. The comparison to Microsoft in the 90s is spot on. Bottom line: Google is acting in an immature way. They need to grow up.”

Part of the problem is that the “don’t do evil” formulation “is completely naïve,” according to Anolik. The specific phrasing doesn’t explain what the company will do, like the elegant formulation of the Golden Rule. Instead, it is left trying to demonstrate the lack of an action — proving a negative never works — when the definition of evil is left in the eye of the beholder. Is it evil as described by consumers? Privacy experts? Investors? Government regulators? The phrase has left the definition of a key brand value in the hands of the world, rather than under Google’s own control.

“If you look at the genesis of Google, you have smart kids looking at cool ideas and creating a business model,” says Mukul Krishna, Frost & Sullivan’s global director for digital media. “The company has grown fast without having time to mature. Undergraduates say I will change the world. Then you grow up and realize that it’s easier said to done.” And, being a publicly-held for-profit company, Google has an obligation to make money.

“You can argue about that getting into China, bringing them into the fold of the rest of the world, is more important than walking away,” Krishna says. “The trouble with these things is that depending on which side of the fence you are on, there are different ways to spin it, and it depends on how good a spinmeister you have.”

This is unlikely to be the last concern about Google’s behavior. Unfortunately for management, “don’t do evil” leaves them no options. To try saying more specifically what they mean would be treated as a retreat from the early promise, and walking away from it would beg for the interpretation that Google was planning all manner of evil. Not what the company would want, especially as it barely avoided one government antitrust action.

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Three monkeys image via Morguefile.com user clarita, standard site license.