Advertising is one of the biggest sources of revenue for Google and has been so for a number of years. However, the Company's policy of actually reading users' e-mails in order to effectively place advertisements inside Gmail has been a particularly controversial one. It stuck to the policy for many years but the company is now all set to discontinue that policy in order to attract more corporate clients.
A necessary change
Google's decision to not read Gmail users' e-mails is not based on some lofty ideas about people's right to privacy but a move that is purely geared towards boosting the company's revenues.
The company wants to acquire corporate clients and this move is their first step towards making their product far more attractive for new clients. In this regard, it is important to point out that Google's office software package G Suite is not subject to such e-mail scanning advertising. It only applies to those who use Gmail for free and according to a Bloomberg report, prospective corporate clients were getting a bit confused about the privacy policy of the company.
G Suite is in competition with Microsoft and Amazon, the leaders in office software packages and eventually wants to be a major player in the industry. The discontinuation of this controversial practice removes any ambiguity in the minds of prospective clients about the privacy policy of the company.
The momentous policy change has been pushed through by the company's cloud unit and not the advertising team, according to the Bloomberg report. Diane Greene, the senior VP of cloud at the company led the push towards this policy.
What happens to revenues?
As things stand, Google is going to lose out on a large chunk of their advertising revenue from their free users when the change kicks in but the company does have a plan in place with regards to solving the revenue gap.
Instead of reading people's e-mail content in order to place ads, the company will now track internet search patterns and YouTube browsing behavior of users to do the same.
Google had been subjected to lawsuits and extreme criticism for this policy but there was no doubt that e-mail scanning advertising worked perfectly for advertisers.
The reversal of the policy is a direct consequence of the big investment that the company has made towards its cloud division and it seems that the company is prepared to do everything in order to gain a foothold in that particular market.
