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Is Google evil?

The online search giant is the internet’s greatest success story. But as ever more data is amassed,

Records of Broughton in Buckinghamshire date back to the Domesday Book, the first medieval census - a comprehensive account of hitherto uncollected personal information. Nearly a millennium later, the online search giant Google was in the former village (now a suburb of Milton Keynes) updating records for its online mapping tool, Street View. A little after 9am on a Wednesday morning, an unmarked black Vauxhall Astra was spotted with a camera on a metre-high pole. People didn't like that "it could see over their garden walls", recalls the local councillor John Bint.

“The car was parked here on the corner," explains Edward Butler-Ellis, a member of the local Neighbourhood Watch. "A crowd gathered around it, but [it was] not the barricade with pitchforks and so forth that [the media] were so intent on promoting. It was a perfectly civil discussion." By the time the police arrived, the car was gone. "The story escalated way beyond what we'd anticipated. We just wanted the chap to go away."

By Friday morning, the event had generated thousands of hits on Google News. "A lot of people didn't realise what was happening," Butler-Ellis says. "My gran had never heard of Google really. When I told her about the cameras, it made her blood boil. 'How dare these people come and take photographs of my house without asking me?' she said."

The controversy seemed to surprise Google; the firm has long and loudly professed its objective to gather user and other data in a quest “to organise the world's information". The company is so good at this that David Cameron wants to put it in charge of organising our medical records. Its products don't just use data, they help us find it - and we continue to ask for help. When we use its software, and with our permission, Google's "bots" follow us everywhere we go: as we search the internet, look up an address, reply to an email, make a purchase, chat with our friends online or walk about with our mobile phone. Though it does not recognise you as an individual, Google's software could soon track and store almost everything you want - and everything you do.

The Google story begins in 1996 with Sergey Brin and Larry Page, two young engineers newly enrolled in a PhD programme at Stanford University in California. The web was in its infancy; finding information online was as cumbersome as wading through the Encyclopaedia Britannica, and often far less decent. Brin and Page had an idea. They chose to look at links between websites instead of just site content, as other search services did. If you, say, searched for "coffee", the old search engines would give you the pages with the most mentions of "coffee". Google gave you the pages that had the most links to them from other sites. So you might get a page that mentioned "coffee" less often, but was deemed more authoritative by previous visitors.

Within a year, the pair had raised a million dollars to develop their project, but then faced the challenge of finding a way to make money out of it. Their solution - charge companies to advertise on specific searches, right next to the results.

The pair's innovation transformed Google into a new type of company that has defined the internet, one that organises information in order to make money from advertising, knowing what users want and telling them how to get it. That's why they needed the photos from Milton Keynes: for a service that, every day, shows millions of people how to get to where they want to go and what they want to find, along with-as part of the Google Maps service-a carefully targeted advert or two.

The model has put Google in conflict with privacy campaigners. Gus Hosein, a senior fellow at Privacy International, sees it less as a search or email company than an advertising company. "That's how they make all their money," he says. Certainly, Google's growth since 2000 has been about finding ways to advance beyond search ads, advertising against thousands of other web pages, including its own email service.

In each case, Google uses information we provide to serve us the right advertisements at the right time. Sometimes, as in Gmail (now Googlemail in the UK and Germany), it's the words we're reading that drive the advertisements: a friend writes that he's livid about a recent football loss, and you see an advert for football tickets. On our mobile devices, it's the GPS tracking that could enable Google to serve up location-based ads.

Hosein thinks Google is working hard to build privacy checks into its system; no human being ever reads your email or scans your searches. But the expansionist vision of Google's chief executive, Eric Schmidt, troubles him. There are 600 million internet-enabled mobile phones out there; that could give Google an even richer seam than search. Phones are very personal in the data they collect. As Schmidt told Maria Bartiromo in BusinessWeek last month: "If we know a fair amount about a person, with their permission, we can target a useful ad - you know, 'It's Eric. You had a hamburger yesterday, do you want pizza today? There's a pizza store on the right.' That kind of ad is likely worth a lot of money to an advertiser because it will generate a sale."

It could be worth a lot to Google, too, enabling it to expand its prowess beyond PCs. With nine billion searches on its pages a month, Google has a 65 per cent share of the US search market, according to the online data-tracker comScore. Its next largest competitor, the once-mighty Yahoo!, has just fallen below the 20 per cent mark. Here in the UK, Google's dominance is even more pronounced: another data-tracker, Hitwise, puts Google's share at 90 per cent, followed by a handful of competitors with less than 3 per cent each.

In other areas of advertising, such as banner ads on partner pages, no one player has a clear majority share yet. But data from Credit Suisse and Evercore Partners suggests that Google is poised to grasp one, showing the fastest growth in each category of advertising, as well as the largest single share (31 per cent) of all online advertising. In the UK, the situation is even more pronounced. As Nigel Gwilliam of the Institute of Practitioners in Advertising puts it, "You can get figures for Google's total revenue in the UK from their financial statements [and] compare their total income to the total UK market. Certainly, the last time I looked, they were in their own right half the [online advertising] market. Search is traded as a dedicated marketplace, and within that they were almost the market."

Google's unparalleled popularity makes its targeting technology even more valuable to advertisers, because having more users delivering collective wisdom about what they find relevant increases the chances of a good advertising match. How much more valuable is hard to quantify, but Google took $21bn in advertising revenue last year, and managed to make a profit of almost $8bn. That represents 30 per cent growth since 2007 and a 40 per cent operating margin - an astonishing performance in any year, but especially during a global recession.

Though some of the protesters in Broughton might have been concerned that Google was out to make a profit from the images of their homes, there is nothing wrong, in legal terms, with it doing so - especially as, in this case, the photos were taken from a public street. On Google's home turf in the US, there are no privacy laws that specifically govern online user data, just a host of voluntary compliance guidelines. For the most part, these guidelines permit all forms of data collection, so long as companies don't lie to consumers about what is being recorded. The European Commission goes a little further: it bars companies in EU member states from holding personal data longer than their express business purpose requires. Google's express business purpose, Hosein notes, is to hold the data we provide in the online "cloud", where it may stay indefinitely. As Schmidt's vision of hamburger-hawking mobile phones reveals, Google is not apologetic about its business model.

Hosein is critical of what he sees as the failings of a legal order built on what companies say they will do, rather than explicit restrictions on what they can do, which means that they can only be penalised for breaking their own commitments - that is, for holding more data, for a longer period of time or for a different use, than they initially promised. The penalty a company faces for going against its word is a flat £5,000 in the UK; in the US, it's just a verbal slap on the wrist.

Yet data aggregation and targeted advertising - the practices that make Google so profitable, and so alarming to some - risk landing the company in a different sort of trouble: the quagmire of competition law. By being strategically so good at pursuing its founders' data-driven vision of the social good, might Google cross a legal line with its potential dominance in gathering and organising information? The question agitates the otherwise amiable Oliver Rickman, Google's UK spokesman. A casual post on the social networking site Twitter, requesting information from friends for this story, received a quick rebuttal from the company.

Rickman is not wrong to be worried. After all, antitrust law (as competition law is known across the Atlantic) succeeded in breaking up the world's largest oil company, Standard Oil, in 1911, and came close to victory against Microsoft a decade ago. That is why Google has invested in a top-of-the-line legal defence team, led by Dana Wagner, a young lawyer who cut his teeth at the US department of justice. Fresh from the older, greyer offices of federal regulators, Google's new recruit is fiercely committed to the company's mission and promises. He dismisses most anti­trust arguments as the cynicism of competitors, or those who haven't seen the digital light. "One of the reasons the internet has been so successful and such an engine for growth and innovation is that there hasn't been a lot of regulation," he says. "There is certainly a role for sensible antitrust law, but it should be kept to a minimum."

The law is broadly similar in the US and the EU. Structured to protect companies from one another as much as to protect consumers, competition provisions (or antitrust laws) bar dominant companies from abusing their position to destroy rivals or overcharge customers, and seek to prevent rising stars in an industry from using unfair practices - such as price manipulation, customer coercion, collusion with rivals or merger activity - to secure dominance. Mergers and acquisitions involving dominant players that reduce competition are particularly closely scrutinised, even if the company hasn't otherwise abused its position.

All these provisions, however, begin with market definition: what is the company really selling and to whom? And has it done anything specific and deliberate to block out - or buy out - the competition or to manipulate price to the customer? Google says it hasn't, insisting that its dominance in search and search-based advertising is a function of its superior products and technology. Indeed, the company has even set up a "Data Liberation Front", apparently to ensure consumers are not "locked in" to its products. They remain with Google by choice. Richard Liebeskind, a former justice department lawyer who now specialises in antitrust litigation, explains: "If you gain a monopoly by skill, foresight and industry, none of that violates the antitrust laws." Google being big may be scary, but it's not illegal.

Nonetheless, in 2007, when Google decided to buy another advertising firm - DoubleClick - rivals including Microsoft and Yahoo! were quick to condemn the deal, arguing that it gave Google an unfair monopoly. By a vote of four to one, the US Federal Trade Commission decided it did not. But Google was now being watched. When, in 2008, it tried to strike a partnership with Yahoo!, the US department of justice decided it would investigate. Google abandoned the deal. Wagner claims that many challengers are just envious of Google's search skills. After all, rivals - led by Microsoft - have pooled their funds to get their own team, a venture euphemistically named Initiative for a Competitive Online Marketplace (ICOMP).

Momentum to challenge Google is building from smaller players, too, with different search technology. One firm,, filed suit in February this year, alleging that Google had "terminated the voluntary course of dealing it had with SourceTool [TradeComet's affiliate] by manipulating its auctions so that SourceTool faced vastly higher prices to acquire search traffic, prices so high it was uneconomical for SourceTool to win auctions that it had routinely won prior to Google's exclusionary strategy". Google denies the allegations and is fighting them vigorously.

Wagner is unperturbed. "As a successful company, we expect scrutiny; we're not bothered by it," he says. Yet Christine Varney, newly appointed by President Obama to lead the antitrust division at the US justice department, has an eye on the company. "Microsoft are so last century," Varney is reported to have said before her appointment. "Google has a monopoly in online advertising."

Her first task will be to rule on the legality of a deal Google has struck with US copyright holders to digitise millions of old library books and make them available and searchable online. The endeavour is costing Google hundreds of millions of pounds and has won praise for its scope, but the deal includes clauses that could make it harder for anyone else to do the same. While publishers may offer similar agreements to other companies, they may not offer them better terms than Google now enjoys. In addition, in a quirk of the terms, Google obtained exclusive access to so-called orphan works - out-of-print books with expired copyrights where there is no copyright holder who can offer the books to other companies. The case goes to the heart of Google's core business model: acquiring access to, searching and then monetising data that is already out there. Like the gardens of Milton Keynes, what's valuable about the library to Google is finding out what users search for within it.

Predictably, Microsoft was the first to complain. David Wood of ICOMP says: "If antitrust law fails in this case, that means we need new regulations." The case for new regulations - or at least new case law - was previously made by Pamela Jones Harbour, the one US federal trade commissioner who dissented from the Double­Click judgment in December 2007. (The FTC, incidentally, couldn't find her opinion, and advised that we use Google to search for it.)

Google successfully argued that, because DoubleClick was a display ad firm specialising in flashy banners and Google's ads were mostly tied to keywords and came in text form, the two firms weren't really in the same business, and so Google would not gain a significant advantage in the market. Harbour's view had been that Google was in the business of "targeted online advertising", and any and all data that advertisers want would eventually be useful to it. She explained: "Search information, gathered by Google, combined with browsing information [information on what sites we visit], gathered by DoubleClick, will create a far richer source of data to enable highly targeted advertising."

In Harbour's view, expansion that brought Google new data could further its dominance in targeting adverts to what we say we want. Whether it is adding new books to search pages that users visit or new features to Gmail, Google is expanding its share in the only online market from which anyone has worked out how to make money: online user data.

Harbour was arguing that Google's expanding share of user data would give it an unassailable advantage in targeting online adverts. In doing so, she was making the link between privacy concerns about Google's control of personal information and competition concerns about Google's dominance in online advertising. As Harbour wrote in her dissent, "After all, why would Google pay billions of dollars for Double­Click out of the hands of competitors, if Google does not intend to combine the two firms' valuable datasets?"

At the time, Google insisted advertisers did not see it that way. Since then, the ground has shifted. As Wagner says: "Before, text-based search ads were like direct-response ads, where display ads were based on branding, but now people realise that there's a branding value to search ads and, as the technology improves, they do converge." Increasingly, Google uses the same insights about our preferences to target all internet advertising.

This is leading some lawyers to look back at Harbour's proposed remedies. In the case of Google and DoubleClick, she wrote, "The commission could have asked the parties to make binding commitments regarding their handling of data, and to memorialise those representations in a consent agreement." She suggested that the FTC adopt this standard as a "future approach to data mergers".

As Google's legal team points out, other companies such as Microsoft now see advertising based on user preferences as the main revenue source online and can seek to obtain, and monetise, user data, too. That hardly helps regulators and consumers who may want less, not more, surveillance. However, solving the problem is difficult: on the fast-changing web, predictions about what Google and its peers will do next are often shots in the dark. We know a whole lot less about their plans than they do about us.

Maha Atal is a business journalist in New York. Damian Kahya is a journalist based in London

This article first appeared in the 24 August 2009 issue of the New Statesman, Is Google Evil?

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Putin’s new Cold War

Assassination attempts, cyber-attacks, military interventions – Russia is once again playing a deadly game with the West. Yet beneath the bravado is a nation riddled with insecurities.

Vladimir Putin is not one to accept criticism from the West, even when his country stands accused of attempted murder using military-grade nerve agents. Russian responses to the accusations have been dismissive, even suggesting that British intelligence was really responsible for the attempted murder on 4 March of Sergei Skripal and his daughter Yulia in Salisbury, combined with knowing observations that their fate should be a warning to other traitors.

Russia has been on the receiving end of sanctions and diplomatic slights ever since Crimea was annexed in March 2014, and Putin will expect to ride out whatever punishments the British can put together in the same way that he has ridden out those of the past. He will talk up the resilience of the Russian state and identify appropriate forms of retaliation that his adversaries will find difficult to match.

He may even wonder whether heightened tension with the West will help him with his other main preoccupation this weekend – the first round of his re-election as president on 18 March. Putin’s message to the Russian people has been for some time that they are under attack from old enemies and that this requires national unity and a readiness to sacrifice. He does not need to worry about the result. His victory is taken for granted. Polls show him romping home with about 65 per cent of the vote, with the other seven candidates all managing about 5 per cent each.

There are no credible opposition figures because murders, imprisonments and denunciations have left few capable of taking on this role. The anti-corruption campaigner Alexei Navalny might have made a dent on Putin’s majority, but he was barred from standing by the Central Election Commission. The only thing that might worry Putin is that too few people will come out to vote and so detract from his victory. Given the lack of a real contest, minimal actual campaigning, calls for a boycott from Navalny and his supporters, declining living standards and little for the Russian people to look forward to, the turnout could well be less than the 65 per cent achieved in 2012, which was itself down from 70 per cent in 2008.

This will be Putin’s fourth term (five if you include the 2008-2012 period when he swapped places with his prime minister, Dmitry Medvedev). He may not be following China’s Xi Jinping in getting himself declared president for life, but he has already had the presidential term extended from four to six years. This means that he should be in power until he is 71. As Western governments work out what to do about Russian disruption, there is not much point looking forward to a new leadership in Moscow that might be interested in starting afresh. They need a policy for Putin that can last for some time.


This is one reason comparisons are being made with the Cold War – a period that began after the Second World War and lasted until the fall of the Berlin Wall in November 1989. Over this period relations between the two superpowers, the US and the Soviet Union, and their respective allies were tense and dangerous. There were many vicious conflicts, often involving client states, but a third world war, which was expected to involve massive use of nuclear weapons, was avoided.

In the 1990s it was hoped and believed all this could be consigned to history and that a new period of peace and prosperity could be enjoyed by all. Well before the start of the Ukraine crisis in March 2014 it was apparent that these hopes were not being fulfilled. Russia complained about the West demanding a rules-based international order while regularly breaking its own standards.

How useful is it to think about the new situation as a cold war? Comparisons with the previous one can be, as we shall see, instructive, if only to explain why things are very different now. But “cold war” is also a more generic category. The term was first used in France before the Second World War to describe circumstances that had not yet led to actual hostilities but were likely to do so at any time. This was how the phrase was understood when employed by American commentators in the late 1940s – they had no reason then to expect a long stalemate but were looking ahead to a period when the possibility of a “hot war” was very real. And this is how we might think of a cold war now. It is not so much a replica of what we might call Cold War 1.0 but a new version with its own characteristics. Cold War 2.0 deserves the designation because it might turn hot. That is the risk that demands attention.

In some respects it is already quite warm, given the number of active measures recently taken by Russia against the West. As a reminder of the most dreaded aspect of Cold War 1.0, Putin started this month introducing a collection of new nuclear weapons, including a cruise missile that could “reach anywhere in the world” and bypass all forms of defence. Meanwhile, in tones reminiscent of the early 1980s, Nato generals have been describing the extent of the recent Russian build-up of conventional forces facing the Baltic states and the struggle the alliance would face when responding to a quick offensive, even if over time (if there was time) its superior strength would win out.

The emphasis on nuclear power is one of the major continuities between the two cold wars. It is the foundation of Russia’s claims to great power status (which is why Putin refers to it with alarming regularity). The other is its permanent membership of the UN Security Council, which allows it to prevent other great powers from ganging up on it. Yet the differences between the cold wars 1.0 and 2.0 are profound.

The most obvious and major change is that Russia is in a far weaker position than the Soviet Union was. At the end of 1991 the Soviet Union split into 15 republics and they all went their separate ways. Three – Estonia, Latvia and Lithuania – are now members of Nato. All its former allies in the Warsaw Pact have now joined Nato too. Moscow’s sphere of influence has therefore shrunk dramatically. Unsurprisingly this has led to a sense of isolation and insecurity. The priority for Russian foreign and security policy has become the old Soviet space – its “near abroad”.

Second, Cold War 1.0 was a global affair. Although it began in Europe, it soon spread to Asia and then on to the Middle East and Africa. In Cold War 2.0 Syria is the major exception to Russia’s European focus. Moscow stepped up its engagement in 2015 in order to prevent the defeat of President Bashar al-Assad. This operation was more successful than the one in Ukraine where Russia is stuck sustaining an unstable enclave. Putin is now a major player in Syrian affairs, although, as he is discovering, this is a mixed blessing.

Despite having done enough to ensure the survival of the Assad regime, Putin has not yet managed to work out how to bring sufficient peace to allow Russia to withdraw. Nor is this really part of Cold War 2.0 as a new arena for conflict with the West. Neither President Obama nor President Trump was inclined to get directly involved in Syria, despite the unfolding humanitarian disaster. They both largely confined themselves to mounting air strikes against Islamic State and its supporters.

Third, the shrinkage from the Soviet Union into the Russian Federation had major economic consequences. Almost until its fragmentation the Soviet Union had the second-largest economy in the world. It now vies for 13th place in the economic league table with Australia, a country with about a seventh of the population. Its GDP is about 60 per cent that of France and Britain, 40 per cent of Germany’s and not even 8 per cent of the US’s. In addition its economy is severely unbalanced. It is extremely dependent upon energy exports, which is why it gained in strength during the 2000s, as energy prices rose to new heights, and slumped after prices fell in 2014. Rebalancing the economy was one of Putin’s objectives early in his presidency, but chronic corruption and disregard for the rule of law have held it back.

Fourth, during Cold War 1.0 the interaction between the Soviet bloc’s economies and those in the rest of the world was minimal, other than in the energy sector. Since 1991 the Russian economy has engaged much more directly, using Western capital markets, importing Western goods and technology, and exporting oil and gas in return. Russia has always seen its position as an energy exporter as a source of leverage as well as revenue, a means of demonstrably rewarding friends and punishing enemies. Over time this has weakened Russia’s position in the market as customers become wary of being too dependent upon it as a supplier. At the same time, substantial economic connections with Russia provided the West with opportunities to impose sanctions, although these have largely been on individuals rather than whole sectors of the economy.

Fifth, Moscow can no longer claim leadership of an international ideological movement. There are some old leftists who still find it hard to think of Moscow as anything other than a leader in the struggle against global capitalism and imperialism. Its main messages, however, are now crudely nationalist, and so its natural supporters are on the xenophobic right – figures such as Nigel Farage, Marine Le Pen and Viktor Orbán. Russian sympathisers are now most likely to be found among misogynistic, racist and homophobic parties and movements.

These have gained ground in Europe largely because of the migration crisis, and Russian propaganda has done what it can to encourage this. Putin can appear to be more sympathetic to popular concerns than Brussels, Paris or Berlin. Yet this is not the same as leading a movement with a clear ideological identity. A number of pro-Putin politicians have come to power in EU states, including Viktor Orbán in Hungary but Russia’s lack of economic power means that these leaders end up complying with mainstream EU policies (including sanctions).

Sixth, Cold War 1.0 was a struggle of the pre-internet age. Cold War 2.0 has been shaped by the internet. This has provided opportunities for new forms of coercion and influence that have the advantage of being relatively cheap and potentially covert. They allow for provocations just below the threshold of what might lead to a hot war. In this way conflict can be carried on in a grey world of actions that are hard to attribute, and may be enacted by private individuals and groups acting as agents of the state. When critical information systems go down suddenly, affecting banking or a government bureaucracy, or fake and inflammatory messages overwhelm social media, the fact that Russia is responsible may be obvious but hard to prove. Even when the evidence is overwhelming the response is often simple denial.

The intensity of Russian activity below the level of actual war is worth noting. Attention in the UK is focused on attempted assassinations. But the other high-profile issue concerns the extent of Russian interference in the 2016 US presidential election campaign. Special counsel Robert Mueller has reported on the role of the Internet Research Agency, a St Petersburg-based “troll farm” which was part of an effort to develop links with far-right and far-left groups opposed to “globalisation” and liberal interventionism. Russia has also been blamed for the Petya ransomware attack of June 2017, which was originally directed against Ukraine’s financial, energy and government institutions – but its indiscriminate character meant that it spread further to other European businesses, causing many millions of dollars’ worth of damage.

The opening ceremony of the South Korea Winter Olympics was also attacked, with the official website going down and on-site technology failing, in such a way that North Korea might have got the blame at a time when South and North Korea were engaging in talks to reduce tensions. A likely motive was revenge for the International Olympic Committee’s decision to ban the Russian team from the Games because of its history of doping violations (a practice that showed how ready Russia is to gain advantage by breaking the rules). The German government has disclosed that federal computer systems have been penetrated by Russian hackers.

Responsibility is always denied, without much attempt to make the denials plausible, and often with a knowing sneer. Refusal to be held accountable for actions is combined with satisfaction at giving an impression of deliberate menace.

Does Cold War 1.0 provide any guidance for how we should cope with Cold War 2.0? For a start, we should accept it is not going to end soon. For this reason, and to prevent small incidents escalating into something much worse, we should keep open lines of communication and be prepared to c0-operate when it is in our mutual interests to do so. There are, for example, some decaying arms control agreements left over from easier times that need some attention. In addition, while bad behaviour must be called out, we should also recognise that suitable sanctions will be hard to find. A tit-for-tat response to attempted assassinations is hardly appropriate.

Although our media continues to challenge Russian narratives, Western governments are never going to be much good at state-sponsored information campaigns. It is worth noting, however, that Russians are convinced that the West is quite brilliant at undermining governments this way, citing as examples the Arab Spring of 2011, demonstrations against Putin in Moscow in 2011, and the uprising in Ukraine in 2014 (indicating their difficulty in believing that popular movements can develop without substantial help from foreign agents). There are also reasons to be wary of engaging in offensive cyber-operations, as they can get out of control, although temptations to move in this direction are likely to grow.


It is important to keep all this in perspective. China is a far more important player in international politics and economics, and bigger issues are posed by the wayward course of President Trump’s foreign policy. There have been complaints from Russian dissidents that exaggerating Moscow’s prowess in cyber-attacks or overstating its role in Western elections gives Putin an aura of power that he does not deserve (as well as discouraging honest assessments of why certain political messages turned out to be popular in the West). Putin wants to be talked up and not down, for Russia to appear as a great power whose interests must be accommodated and that must have a say in all important issues.

As Cold War 1.0 ended, it became apparent that a country that had been worrying us so much was hollow inside. Russia should be taken seriously, but in the end it is a minor economic power. It has allowed its insecurities to lead it into behaviour that can hurt its adversaries, but in the end will prevent it from addressing the aspirations of the Russian people. 

Lawrence Freedman is emeritus professor of war studies at King’s College London. His latest book is the “The Future of War: A History” (Allen Lane)

This article first appeared in the 24 August 2009 issue of the New Statesman, Is Google Evil?