As Congress and state attorneys general intensify their scrutiny of Google's business practices — as well as how it collects and stores users' private information — the Internet giant is coming to Vermont to offer ... free website design, web hosting and discounted advertising.
Really? Vermont? Why not California? Or, Virginia or Massachusetts — three states that have a helluva lot more businesses and tech-related companies.
Perhaps it's because two of Vermont's top pols are among Google's critics?
Nah, says Google. There are just not enough Vermont businesses online, and it wants to help them set up shop on the Internet marketplace. Google also wants to get more businesses to advertise on Google Places as the company attempts to make its search engine more relevant to local businesses and other users.
"We are very excited to be in Vermont because there's a high proportion of Vermont small businesses that are not online," said Google spokeswoman Becca Ginsberg. "We also wanted to see what it's like to bring an online offering to a rural state."
The timing couldn't be more impeccable, given increased scrutiny by the Senate Judiciary Committee, which happens to be chaired by U.S. Sen. Patrick Leahy (D-VT).
The committee has been holding hearings on the ways in which Google, Apple and other leading tech companies collect, store and use customers' privacy information. In fact, Leahy created a special Judiciary Committee subcommittee this year to specifically examine the nation's data-privacy laws, and has introduced legislation to give greater protections to consumers.
The Judiciary Committee also announced last week a new subcommittee hearing to be held in September, titled "The Power of Google: Serving Consumers or Threatening Competition?"
In addition to Leahy, Attorney General Bill Sorrell has been raising concerns about Google's anti-competitive behaviors and data-privacy policies, including the collection of unencrypted information by Google's Street View car as it passes through neighborhoods. That car has been seen around Greater Burlington in the past few weeks.
Sorrell serves on the 12-member executive committee of the National Association of Attorneys General. Vermont is monitoring several pending investigations in other states about Google's anti-competitive practices and its data-collection policies.
"I have had attorneys from Microsoft and other companies come from New York or Washington, D.C., in the last couple of months to complain about Google and its alleged anti-competitive behaviors," Sorrell told Seven Days. In addition, he's moderated two NAAG panels related to Google and issues related to search-engine algorithms.
"We've had academics and practicing lawyers on all sides of the issue of how Google operates and allegedly businesses have to play ball with Google or a search for their business will not end up near the top few sites, which is actually where the vast majority of consumer clicks occur," said Sorrell.
Paid placement in searches is what bothers Maplehurst Florist in Essex Junction. The florist's concerns are echoed by FairSearch.org*, a national group that is lobbying federal and state lawmakers to get Google to be more transparent about the algorithms it uses to rank search results.
"I'm a bit confused by Google and their rankings. I used to pop up at the top when you Googled florists in Essex," said Jon Houghton, Maplehurst's owner and manager. "Now, when I do search, it comes back with a whole list of florists above me — eight of them not even based in Vermont. I'm the most long-standing florist in Vermont. How do you get more legitimate than that?"
Hougton said he can't afford to boost his rankings and wonders whether Google's paid search rankings will crowd local businesses out of the marketplace.
Vermont is the second state where Google is rolling out its all-day Get Your Business Online seminars. Three seminars — two in Burlington and one in Rutland — will be held next week. Each seminar will consist of three key workshops: "Get a free website," "Running your business online," and "Introduction to Google AdWords."
Seventeen organizations — from Rural Vermont to the Vermont Chamber of Commerce — have signed on as partners for the three, daylong series of workshops. These organizations have been reaching out to their members to sign up for the sessions.
Google first launched this effort earlier this year in Texas. It's probably just a coincidence that the state's attorney general launched an investigation into Google's Internet search practices.
Google has launched similar programs in Great Britain, Canada, Ireland, Australia, Thailand, Brazil, Spain, Germany, Belgium, France, Italy, Hungary and Poland. These were successful in helping businesses get online and start expanding their customer base, said Ginsberg.
The programs haven't quieted the growing chorus of antitrust complaints in Europe, however. Regulators in the EU and the United States are looking at the allegations.
"In terms of our U.S. rollout, I wish I could tell you there was some great science to this, but we're actually starting our rollout across the country in places where we have people on the ground," said Ginsberg.
Google has an office in Austin,Texas and Matt Dunne, who ran unsuccessfully for governor last year, runs a Google office in Vermont. Next up, Google is also headed to Missouri and Kansas next where its working on the Google Fiber Project.
Google has another Vermont connection: Bill Maris, the vice president at Google Ventures, which invests about $100 million a year in start-up and emerging tech companies, is from Burlington and went to Middlebury College. Maris also launched Burlee.com from South Burlington. He will be a featured speaker at the Vermont events.
Could Google Ventures be looking at investing some of its cash in Vermont companies? Ginsberg wouldn't say.
"We have nothing to announce on this right now, but Google Ventures is looking at businesses in Vermont as well as across the country," she said.
Ginsberg said Google contributed more than $64 billion to the U.S. economy last year through its services to advertisers and publishers, but the multibillion-dollar company wants to do more.
"Small businesses are a key engine of the U.S. economy. We want to give them the tools they need to grow and expand," Ginsberg said. "One of the most important ways we can do this is to help increase their presence online, so they can get more customers."
While 97 percent of Americans look online for local products and services, 63 percent of small businesses do not have a website or online presence, Ginsberg said.
You'd think offering free web design and marketing seminars would upset some in-state firms that do that for a living. Not so for Ted Adler and Union Street Media. Adler is psyched to see Google pay more attention to Vermont.
"Local is kind of the last-mile problem with the Internet," said Adler. "There's a lot of people who are going really hard at the local space right now — Angie's List, Yelp, Foursquare and Facebook's Places. So, it doesn't surprise me that Google is going into that space, too. I don't see this as threatening at all. The more Google is involved in Vermont, the better for Vermont."
Adler believes that businesses who use these seminars as a way to finally create an online presence will eventually want to expand their offerings — and they'll turn to local firms like his to make it happen.
"By putting Google Places listings at or near the top of the page, that has the effect of pushing down everyone else and allows Google to capture the majority of the clicks. And they, in turn, sell those spaces to businesses and force them to pay even more if they want to get into that prime position," said Ben Hammer of Fair Search. "All that we've been asking is for more transparency and more openness about how Google operates."
FairSearch.org has reached out to Sorrell and Leahy in recent months to voice its concerns, and Hammer thinks it's no coincidence that Google is spreading its wealth in the states where key decision makers live.
"At the time when members of Sen. Leahy's committee and the world are looking closely at whether Google's business is dominating the marketplace," said Hammer, "isn't it interesting that [Google is] getting involved in the home states of these senators and doing everything it can to paint itself as a friend of small businesses?"
* This post was updated to correct the spelling of FairSearch.org & the Google spokeswoman. Also, Maplehurst is not a member of FairSearch.org. Included as a link, but not in the article, is the fact that FairSearch.org members include Expedia, HotWire, KAYAK, Microsoft (owner of Bing), Sabre (owner of (Travelocity), and TripAdvisor, among others.
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