Cost of privacy compliance might be behind Google Reader's demise

Google Reader’s impending demise has caused quite a stir on the Internet in the past couple of weeks. The RSS aggregation service has been, after all, very popular ever since it started. Google said the reason for shutting Reader down was a fall in the number of users, but it looks like the cost of ensuring privacy might also have had a role in the service’s demise.

A source told AllThingsD that part of the reason for Reader being shutting down was Google’s reluctance to invest in the staff and infrastructure needed to deal with compliance and privacy issues.

Google is keen on working its system out so that it does not get into trouble around compliance issues, especially where privacy is concerned. This essentially means the search giant needs to have teams of specialists, including lawyers and policy experts dedicated to these issues. The service reportedly did not even have a dedicated product manager or a full-time engineer to handle it when its death sentence was pronounced. Google did not want to invest into additional infrastructure, said the source.

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Privacy issues behind Google Reader’s demise?

Google is avoiding lawsuits like the recent $7 million settlement with U.S. Attorney General over the Street View Wi-Fi case. But one very obvious question comes to mind: why did Google not sell Reader to a third party? The answer is not very simple. It seems Reader is so deeply ingrained into the Google ecosystem that it was easier for the search giant to pull the plug than have it work under a different company.

Nick Baum, an ex-Google employee and one of the original Reader product managers, mentioned that Google Reader had “several millions of weekly active users” in its early days_.“My sense is, if it’s a consumer product at Google that’s not making money, unless it’s going to get to 100 million users it’s not worth doing.”_

Google never specified how many users the service had but Flipboard CEO Mike McCue said two million Google Reader users had connected their profiles to his service in the last few weeks. Not too long ago, Feedly, another RSS service, announced that 500,000 Google Reader users had signed up for Feedly using their Google Reader profiles.

Feedly’s managers said they had anticipated Google’s move to retire Google Reader and they were working on a project called Normandy, which is a Feedly clone of the Google Reader API and runs on Google App Engine. “When Google Reader shuts down, Feedly will seamlessly transition to the Normandy back end. So if you are a Google Reader user and using Feedly, you are covered: the transition will be seamless,” they wrote.

Google Reader will go offline come July 1. The USP of the service has been its easy-to-navigate, inbox-style look that set it apart from the new-age, visually rich RSS services like Flipboard and Pulse.

“We launched Google Reader in 2005, in an effort to make it easy for people to discover and keep tabs on their favourite websites. While the product has a loyal following, over the years, usage has declined. So, on July 1, 2013, we will retire Google Reader,” Urs Hölzle, Google’s Senior Vice President of Technological Infrastructure, wrote in a blog post.

On the other hand, in a bid to stay relevant in today’s day and age, Digg has announced its plans to build a Google Reader-like RSS service. “We’ve heard people say that RSS is a thing of the past, and perhaps in its current incarnation it is, but as daily (hourly) users of Google Reader, we’re convinced that it’s a product worth saving. So we’re going to give it our best shot,” Digg stated. As part of this process, Digg revealed that it wished to “identify and rebuild the best of Google Reader’s features”, and this includes the latter’s API. In doing so, it plans to make it progressive enough to “fit the Internet of 2013”.