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Google's Achilles Heel: Page 9 of 17

Google has also taken some heavy public relations hits for its Google Books Search project (originally called Google Print), which has as its ambitious goal to scan millions of books and make them searchable online. In September, the Authors Guild filed a class-action lawsuit, charging that Google violated copyright law by digitizing books without the permission of copyright holders. In October of this year, major publishers represented by the Association of American Publishers jumped on the bandwagon with a suit of their own. Still, in November, Google resumed its controversial copying of library books.

Then, also in October, Rates Technology Inc. filed suit against Google claiming that Google Talk illegally uses Rates' technology for billing VoIP phone calls. Google Talk is Google's VoIP and instant-messaging platform, which the company launched earlier this year. The suit alleges infringement of two patents obtained in 1995 and 2001. Rates is seeking patent enforcement, damages, and court costs, and an injunction against Google's use of the technology.

"You take this cluster of legal problems, and it begins to get serious," said Stephen Arnold, a Google watcher and author of "The Google Legacy: How Google's Internet Search Is Transforming Application Software." "It may not shut down services, but it could cause advertisers to jump ship."

Eroding Public Perception

Legal issues, privacy concerns, and perceived conflict of interest are eroding Google's reputation, bringing growing skepticism about Google's famous mantra, "don't be evil."