Google in Fight Over Content That Appears in Search Results

Mr. Mosley was the victim of a spectacular 2008 sting by News of the World — Rupert Murdoch’s disgraced, and now defunct, tabloid weekly — which posted photos and video of him participating in a sadomasochistic sex party that the paper described as “a sick Nazi orgy with hookers.”

The Nazi claim, in particular, was a bitter one; the son of Sir Oswald Mosley, a World War II-era British fascist, Mr. Mosley has long bristled at the suggestion of Nazi sympathies. He sued News of the World in a London court for breach of privacy and was awarded £60,000, or about $94,000, in damages.

The High Court ruled that there was “no evidence” that the sex party had been “intended to be an enactment of Nazi behavior or adoption of any of its attitudes.” It also found that there had been “no public interest or other justification for the clandestine recording.”

The court ordered News of the World to remove the material in question from the Web, naturally, and there the story might have ended. Except, of course, that the photos and video continue to live on the Internet, via social media and on Web sites maintained by individuals. Mr. Mosley has been fighting ever since to make them disappear.

And that is where Google comes in: Mr. Mosley asked a Paris court during the past week to order the Internet giant to create an algorithm to filter all such photos from its service and search engine, now and forever. His lawyer told the court, the Tribunal de Grande Instance, that if Google France refused to remove the offending images it should face fines.

The French court said it would issue a ruling on Oct. 21. Mr. Mosley has filed a similar case in Hamburg that is to be heard this month.

Google strongly disputes any responsibility.

“We sympathize with Mr. Mosley’s situation,” Google said in a statement, noting that it had always honored his requests to remove obviously incriminating links. “But his proposal to filter the Web would censor legitimate speech, restrict access to information, and stifle innovation.”

The company noted that there was already a solution to the problem: “Going after the actual publishers of the material, and working with Google through our existing and effective removals process.”

Google says that it has already taken down “hundreds of pages” with images that obviously infringe on the court ruling when it is requested to do so, but that there are many cases in which it is not immediately clear whether the content is affected by the ruling, and that in those cases a judge or other competent official should make the decision.

It cites French and E.U. law, which do not require search engines to comb the Web for unlawful content, and it argues that, in any case, many of the hits the photos receive are driven by communications among individuals, so blocking them on search would not end the problem.

A concurrent case, at the European level, would appear to back Google. The European Court of Justice, which is based in Luxembourg, is currently examining a Spanish man’s claim of a “right to be forgotten” on the Web — something Silicon Valley companies oppose.

In a sign that the case might be swinging the technology giants’ way, Niilo Jaaskinen, the Finnish lawyer who serves as advocate general of the court, issued an opinion in June that search engines were not responsible “for personal data appearing on Web pages they process.”

E.U. data protection law “does not entitle a person to restrict or terminate dissemination of personal data that he considers to be harmful or contrary to his interests,” Mr. Jaaskinen wrote. Though the court is not bound by the advocate general’s opinion, it often follows his recommendations. It has yet to decide the matter.

Why would Mr. Mosley seek action against an American company in a French court for actions committed in Britain by a now-defunct English newspaper? It might have to do with France’s strict privacy laws, which make it a criminal offense to record another person — image or sound — in a private space without the person’s consent.

His lawyer, Clara S. Zerbib, said that it was because a Paris court had ruled in 2011 that the recording of the News of the World pictures, without Mr. Mosley’s knowledge in a private place, had been illegal and that a judge might thus find that distributing such pictures on the Internet was also illegal. She noted that Mr. Mosley also worked in France as president of the International Automobile Federation, the Paris-based governing body of Formula One racing, and was concerned about his reputation there.

Mr. Mosley, in a telephone interview, said that Google had been helpful, if not always swift, in answering his requests to remove photos but that he should not have to constantly ask them to do so, since the court ruling had made plain that they were illicit.

“We shouldn’t have to keep asking them every time these photos come up,” Mr. Mosley said. “You have to employ someone to look every day. They shouldn’t put them up in the first place.”

He acknowledged that by fighting Google in court, he was inevitably attracting additional attention, but that he had to do it, because “anybody who’s interested in me will Google me, and the first thing they see are these photos.”

Mr. Mosley and his legal team say there do not appear to be any technical barriers to Google’s doing what he is asking. Google, working to address British concerns about child pornography on the Web, said in June that it had the capacity to identify and block images automatically, using “hashing” technology.

“If you have any respect for the rule of law, and it’s been decided by the court that it’s illegal, then you shouldn’t reproduce them,” he said.

But Google is adamant that the automatic filter Mr. Mosley is demanding would be a blunt tool that would indiscriminately eliminate both lawful and unlawful content, including perhaps reporting on Mr. Mosley’s own case.

“We hope that the French court will not order us to build a censorship machine,” the company said.

Bits Blog: Trying to Make Google Glass Fashionable

State of the Art: The Moto X From Google, iPhone’s Latest Challenger

The one truly huge, magnificent, radical idea of the iPhone, back when it was introduced in 2007, was to get rid of buttons. Make the whole phone a black rectangular touch screen.

By now, every company and its brother has done that. Everybody’s added voice recognition, GPS and navigation. Everybody’s sharpened up the screens to the point where you need a microscope to tell the difference.

So now what? How do you distinguish your phone from the more than 4,000 other touch-screen phones? (That’s not a joke. There have actually been 3,997 different Android phone models so far. And six iPhones and a motley assortment of Windows and touch-screen BlackBerry phones. Heaven help the landfills.)

With much fanfare, Google proudly presents its answer: the Moto X.

This phone ($200 with contract, 5.1 x 2.6 x 0.4 inches) is the first that Motorola has produced since Google bought it a year ago for $12.5 billion.

By looking at it, you’d never guess that this is the Android phone that Motorola hopes will change everything. Its curved back is plasticky, not classy metal (like the HTC One) or glass (like the iPhone 5). Its comfortably 4.7-inch screen looks great, but it isn’t as big or sharp as the Samsung Galaxy S4 and the HTC One. The phone is plenty fast, but its processor isn’t the latest and greatest.

But the Moto X does offer five features that no phone has offered before.

Feature 1: You can design your own color scheme. You’re offered a choice of 18 colors for the back panel, black or white for the front, and seven colors for the accents (the buttons and ring around the camera lens). The color choices are excellent; the odds of you and your frenemy showing up at a party with an identical Moto X phone are one in 252.

Later this year, you’ll even be able to order a back panel made of real wood — in bamboo, teak, ebony or rosewood. Motorola’s testing shows these beautiful panels to be just as tough as plastic (although more susceptible to termites, I’m guessing).

While you’re online, you can also order color-matched cases and earbuds, specify the wallpaper you want or request an engraved message for the back. For now, only AT&T offers the color choices. Verizon, Sprint and T-Mobile will offer only black or white until later this year.

You get your customized phone within four days, courtesy of Feature 2: it’s assembled right here in these United States. The components are still made in Asia, but they’re put together in Texas — you can lose less sleep worrying about underpaid Chinese workers.

Feature 3 is the most useful: touchless mode. As with Siri on the iPhone, you can command the phone to dial a number, send a text, open an app, set your alarm, look up a fact on the Web, and so on.

But unlike Siri, you don’t hold down a button to speak. The phone is always listening, even when it’s in your car’s cup holder.

It works remarkably well, as long as you precede your command with the salutation, “O.K., Google Now.” Without ever taking your eyes off the road, you can say, “O.K., Google Now. Give me directions to the Empire State Building.” Or, “O.K., Google Now. Remind me at 8 p.m. to give the dog his pill.” Or, “O.K., Google Now. Make an appointment for Thursday at noon with Bob.”

This truly inspired idea is a leap forward in both safety and convenience. It owes its success to a special chip that does nothing but listen all day long. It does, however, come with fine print.

For example, you have to train the phone to recognize your voice. In a silent room, you have to say “O.K., Google Now” exactly the same way three times.

If you’ve password-protected your phone, this feature loses much of its power. It won’t execute most commands until you first pick it up and unlock it. So much for touchless.

And Android’s voice commands are still no match for Siri. The phone recognizes the basics, like “Wake me at 7:30 a.m,” “Open Angry Birds,” “What’s Google’s stock price?” and “Check the forecast for Memphis on Friday.”

Bits Blog: Is Google More Like Microsoft or Apple?

Google Stumbles as Slump in Ad Rates Deepens

SAN FRANCISCO — Google views the computing shift to smartphones and tablets as a golden opportunity, but the Internet search leader's second-quarter performance served as an unsettling reminder that it poses a nagging financial challenge, too.

The report released Thursday showed Google's average ad rate fell from the previous year for the seventh consecutive quarter. In an unexpected turn, the decline deepened for the first time in a year.

The average ad rate, or "cost per click," fell 6 percent during the three months ending in June. The magnitude of the declines had eased in each of the previous three quarters, raising hopes that the worse was over. Instead, things deteriorated from the 4 percent decline in ad rates during the first three months of the year.

The regression undercut Google's earnings and revenue. Both fell below analyst forecasts, spooking some investors. Google's shares fell $37.18, or 4 percent, to $873.50 in extended trading after the results came out.

Other unwelcomed developments also loomed over the quarter.

Excluding the costs of stock given to employees, Google's operating expenses climbed 27 percent from last year to $4.25 billion. That increase renewed concerns that Google is pouring too much money on far-flung projects, such as the development of driverless cars and balloons equipped with Internet-beaming antennas, instead of focusing on its main business of Internet search and advertising.

Motorola Mobility, a slumping cellphone maker that Google bought for $12.4 billion 14 months ago, also remains a headache. The subsidiary lost $342 million in the latest quarter, widening from $199 million a year earlier, when Google owned Motorola for only part of the reporting period. Motorola now has lost a total of $1.7 billion under Google's ownership, despite layoffs and divestitures that have whittled Motorola's workforce to 4,600 people, down from 20,300 at the same time last year.

Although he wouldn't forecast when Motorola might start making money, Google CEO Larry Page told analysts on a Thursday conference call that he is excited about the upcoming release of a new phone called Moto X. Page provided no further details about the phone, which he and other Google employees have been testing.

If Google backs the Moto X with an expensive marketing blitz, it would drive up the company's expenses again later this year.

Mobile ads, though, were the biggest issue on investors' minds.

Although the problem isn't as severe as at other companies, including computer makers such as Dell Inc. and Hewlett-Packard Co., Google is still having trouble navigating a technological transition driving more online activity on to smartphones and tablets. Those devices pose a financial challenge for Google Inc. because their smaller screen sizes fetch lower ad rates than the marketing pitches made on traditional desktop and laptop computers.

Google is in a far better position to prosper from mobile computing because it makes Android, the most widely used operating system on smartphones. The software also is gaining traction on tablets challenging Apple's pace-setting iPad. Google is expected to unveil the next generation of its Nexus tablets running on Android next week.

Android typically features Google's search engine and other services, such as maps and Gmail, giving the Mountain View, Calif., company more opportunities to show ads.

Now, Google is taking steps to persuade advertisers to pay higher prices to connect with consumers on mobile devices at times when they appear to be mulling a purchase or may be in a merchant's neighborhood.

Google is trying to drive up prices more quickly by changing the way it sells ads to prod more marketers into buying spots on mobile devices at the same time they plan campaigns aimed at PCs. About 6 million advertisers have already switched to Google's new pricing system. All marketers will be forced to adopt the new approach, known as "enhanced campaigns," by the end of the month.

In Thursday's conference call, Page described the switch to enhanced campaigns as the biggest change that Google has ever made to an online advertising platform launched more than a decade ago.

"I think we're still in the very, very early stages of that," Page said. "We changed a tremendous amount for how our teams operate, how our advertisers operate, how everyone buys those ads, what the users see, and we've done it pretty well."

Wedbush Securities analyst Shyam Patil said he believes Google is headed in the right direction in mobile advertising, despite the second-quarter slip in price.

"They are going to come up with the right solution, although now I am not sure if it is going to happen this year," he said. Patil also said he expects Google's stock to rebound quickly because too many investors believe the company's remains among the best bets in technology.

Google earned $3.2 billion, or $9.54 per share, in the second quarter up 16 percent from $2.8 billion, or $8.42 per share, a year earlier.

If not for the costs of employee stock compensation and charges tied to Motorola, Google said it would have earned $9.56 per share. That missed the average target of $10.80 per share among analysts surveyed by FactSet.

Revenue rose 19 percent to $14.1 billion, from $11.8 billion.

After subtracting Google's ad commissions, revenue stood at $11.1 billion — about $275 million below analyst projections.

Google Results Show Struggle With Mobile

Despite a range of efforts by Google, the riddle remains unsolved, its financial report Thursday revealed.

Google reported second-quarter results that missed analysts’ expectations for revenue and profit. They showed that its desktop search business continues to slow and ad prices continue to fall as it struggles to make as much money on mobile devices.

The report was particularly incongruous given how Google’s share price climbed 27 percent this year.

It is a vexing problem for every company that has generated revenue through advertising, be it a century-old magazine with a mobile app or a new Web site aggregating the news. Mobile ads do not command the premium that Web advertising does (and Web ads do not make as much as print ads).

Colin W. Gillis, a technology analyst at BGC Partners, wrote a haiku before the earnings announcement: “The results should be/ pretty as a picture to/ justify the stock.”

They were not. Shares, which fell 1 percent ahead of the report on Thursday, fell another 4 percent in after-hours trading.

“One of the reasons why people like Google is you can look forward and see what they’re doing with Glass and laying fiber and driverless cars and Chrome, chasing after new revenue streams,” Mr. Gillis said. “But those are still pretty far away. Google’s core business is all about advertising and clicks, and the core business is absolutely maturing.”

Mobile ads, he added, are inexpensive yet “overpriced because the conversion rates are so low.”

“It’s still too hard to transact on a phone,” Mr. Gillis said.

Google had seemed to have finally found a solution to the riddle, by making the biggest-ever change to its AdWords advertising product. The new program, called enhanced campaigns, which was introduced in February and will be mandatory for all advertisers on Monday, gives advertisers less choice about advertising on mobile devices by automatically including desktop, tablet and cellphone ads for all campaigns. Advertisers can choose not to buy cellphone ads but are required to buy tablet ads.

Google says that this simplifies the process for advertisers and makes it easier to reach customers who use devices indiscriminately. More important than the type of device, the company says, is whether someone is at a desk or on the sofa, in the mood to shop or eat.

But it also means that the price of mobile ads, which has been about half that of desktop ads, will most likely increase. Google’s ads are sold at auction, and one reason mobile prices have been low is that there has been less demand. Enhanced campaigns should change that.

For example, the cost per ad click, known as C.P.C., for clients of the Search Agency, a search ad firm, rose 22 percent in the quarter, largely because of Google’s ad-buying changes. It was the first time that tablet ads cost more than those on desktops, and advertisers increased spending on smartphones 25 percent, the most of any device category.

“There used to be a discount you would get for going after traffic on tablets instead of desktops,” said Keith Wilson, vice president for agency products at the Search Agency. “Now that is disappearing. That is what is going to drive up C.P.C.’s in the mobile space. This has been a catalyst for prioritizing mobile.”

But it was too early for the results of the new ad program to show up in Google’s financial report, company executives said Thursday. The price that advertisers pay when Google users click on their ads decreased 6 percent from last year and 2 percent from the previous quarter, declining for the seventh quarter in a row and at a steeper annual rate than in the previous quarter.

Mobile ad pricing is “one of the many factors at work” affecting click prices, said Nikesh Arora, Google’s chief business officer. Google is in the early stages of enhanced campaigns and it will most likely take a year for the results to become apparent, he said. He added that another important metric at Google, the number of clicks on ads, is up 23 percent over last year, partly because of increased mobile use.

Larry Page, Google’s chief executive, said that six million advertisers had already switched to enhanced campaigns. American Apparel, according to Google, doubled its mobile conversion rate with the new ads, and M&Ms, the Mars candy brand, increased it by 41 percent.

In addition to enhanced campaigns, Google is doing other things to improve its mobile offerings and its profits from mobile ads. It has been encouraging Web sites to improve their mobile versions, and last month it said Web sites without easy-to-use mobile versions could fall in search rankings. And it introduced its product listing ads, for shopping, to mobile devices.

Google reported second-quarter revenue of $14.11 billion, up 19 percent from $11.8 billion a year ago. Net revenue, which excludes payments to ad partners, was $11.1 billion, up from $9.2 billion. Net income rose to $3.23 billion, or $9.54 a share, from $2.79 billion, or $8.42 a share. Excluding the cost of stock options, Google’s second-quarter profit was $9.56 a share.

Analysts had expected net revenue of $11.33 billion and earnings, excluding the cost of stock options, of $10.78 a share.

Adding to the disappointing results was a $342 million operating loss at Motorola Mobility, which is expected to introduce a new phone, the Moto X, this summer.

As shareholders and analysts wait for Google to find the next product to reignite revenue growth as the core search business slows, Mr. Page acknowledged the challenges of building new products that reach people on the same scale as search.

“It’s pretty easy to come up with ideas,” he said. “It’s pretty hard to make them real and get them to billions of people. And that’s to me what’s so exciting.”

Pogue’s Posts Blog: A Better Google Maps App for Apple and Android Devices

Google Map’s new directory buttons.

Our story so far: Last September, Apple decided to dump the Google Maps app that had been on the iPhone for years. Apple replaced it with its own Maps app — software with so many problems that Apple’s chief executive, Tim Cook, apologized and even recommended that people use other apps until Apple could fix its own one.

In December — incredibly quickly — Google responded by introducing its own Maps app for iPhone. It’s a spectacular app, among the best apps ever written. It’s fast, beautiful and so good at guessing what you mean when you start typing a destination, it’s almost mind reading. You can read the details here.

Today, that delightful news gets even better. Not only has Google improved Google Maps for iPhone, it’s also brought that same free app to three machines that never had it: the iPad, Android phones and Android tablets. (The Android versions are available for download today; it requires the Ice Cream Sandwich or Jelly Bean version of Android — recent versions, in other words. The iOS versions will be available shortly.)

For Androidians, the biggest news is the design of the app itself. It’s modeled on the iPhone app, the one that’s simple and fast and elegant. It’s also uncluttered by the morass of menus that have always plagued the existing Maps app for Android.

But for practitioners of all religions — tablet, phone, iOS, Android — the other news is the new features that today’s new version brings. They include:

* Greater speed. All app versions are faster than before.

* Better place information. Half the time, you don’t even need navigation instructions; you just use Google Maps as the world’s smartest Yellow Pages, to find a nearby restaurant, movie theater, drugstore or whatever.

The details for found places now include a one-line description (“Chinese restaurant famous for dim sum”); a five-star rating system (including a decimal — “4.3,” for example — because, let’s face it, almost everything these days winds up with a four-star rating); the ability to upload your own photos of a place; and a more complete integration of the Zagat guides, which Google bought.

* Greater emphasis on exploration. Google Maps has always excelled at getting you to a known destination. But Google now wants the app to help you choose a restaurant, bar, store, recreation center or hotel, at least in major United States and European cities.

If you tap in the Search box without typing anything, new, photographic buttons appear: Eat, Drink, Shop, Play, Sleep. Each opens lists of corresponding facilities, sorted by criteria like Local Favorites, Popular with Tourists and so on. (Google says that these recommendations are never paid placement.)

* Traffic incidents and auto-rerouting. At last: Google Maps shows more than colored lines indicating current traffic speeds on major roads. Now it also displays tiny icons that represent accidents and construction. Tap one to read the details: “Right lane blocked on 680,” for example. (In case you were wondering, the information on traffic incidents doesn’t come from Waze, the traffic-incident app that Google recently bought. That data has yet to be incorporated into Maps.)

Better yet: Maps now looks ahead for traffic jams on your route, and interrupts your drive with a dialog box that offers to route you around it (if the new path would be quicker, of course). On its own.

* Offline maps. This feature is something of an Easter egg. It’s undocumented, a feature inserted by Google engineers simply because they wanted it. You can access it only if you know the secret. But wow, is it worth it.

This feature memorizes the map data for whatever area is displayed on your screen right now (up to a whole city in size). That way, you can use Google Maps even when you’re overseas and don’t want to turn on data roaming (because that’s insanely expensive), or when you’re in an area where there’s no cell reception. It’s very handy.

To capture a map snapshot like this, tap in the Search box. Use the speech-recognition button and say, “OK Maps.” (It’s a riff on the command “OK Glass” that prepares Google Glass, the company’s “smart headband,” for voice commands.)

A message quietly lets you know you’ve successfully stored the displayed area.

*Nice tablet layouts. On a tablet, Maps really shines. The app smartly reformats itself to take best advantage of whatever screen shape you have: two or three columns of place listings, for example, and luxuriously displayed photos and reviews for each business.

This new, improved Maps app works identically on both major flavors of phone and tablet. You know what? I don’t care how much you distrust Google and its motives. This is crazy good software, some the best work Google has ever done.

Bits Blog: Google Seeks Permission to Publish Data on Security Requests

Jeff Chiu/Associated Press Google’s motion with the Foreign Intelligence Surveillance Court on Tuesday is the company’s latest move to control the public relations crisis that has resulted from revelations of government Internet surveillance.

Google on Tuesday filed a motion with the secret Foreign Intelligence Surveillance Court, asking permission to publish data on national security requests that were made to it and authorized by the court.

The motion is the company’s latest move to control the public relations crisis that has resulted from revelations of government Internet surveillance. It is an escalation of Google’s efforts to publish the data. Last week, it sent a letter to the director of the F.B.I. and the director of national intelligence, asking for the same thing.

By law, recipients of national security requests are not allowed to acknowledge their existence. But with the permission of the government, Facebook, Yahoo, Microsoft and Apple have in the last few days published aggregate numbers of national security and criminal requests, including those authorized by the Foreign Intelligence Surveillance Act. Google has not, because it said that would be less transparent than what it had already published. Its transparency report has since 2010 broken out requests by type, and if it agreed to the same terms the other companies did, it would not be able to publish the report that way in the future.

In the motion, Google argued that it had a First Amendment right to publish a range of the total number of requests and the number of users or accounts they cover.

Google said that its executives had responded to allegations — that it cooperated with the government in Internet surveillance — as best they could, given the government’s restraints on discussing them. But the company said that it wanted to do more for the sake of its reputation, business and users, and for the sake of public debate.

“Google’s reputation and business has been harmed by the false or misleading reports in the media, and Google’s users are concerned by the allegations,” the motion said. “Google must respond to such claims with more than generalities.”

The tech companies have been pressing to be able to publish the number of government requests largely to prove that the requests cover a tiny fraction of users. Though the other companies said they were also pushing the government for permission to publish more detailed data, they said the aggregate numbers were useful to control speculation by setting a ceiling on the number of requests.

Other tech companies affected by the government’s surveillance program, called Prism, have considered going to the secret court, an option that is still on the table, according to two people briefed on the discussions. So far, the companies have been individually negotiating with the government instead of acting in concert.

Still, even if they are allowed to publish more detailed numbers, it would leave many questions unanswered, including details of how Prism works. Also, the number of people affected by FISA requests could be much larger than the number of requests, because once the government makes a broad request, it can add individuals and additional search queries for a year.

Google’s motion also revealed that two of its top lawyers, Kent Walker and Richard Salgado, have security clearance, which FISA requires for handling classified legal orders and materials. It was filed on behalf of the company by Albert Gidari, a partner at the law firm Perkins Coie who has earned a reputation in tech and legal circles as the go-to man on surveillance law.

Google Settles Suit, Clearing Way for Stock Split

SAN FRANCISCO — Google has resolved a shareholder lawsuit blocking a long-delayed stock split, clearing the way for the Internet search leader to issue a new class of non-voting shares later this year.

The settlement announced Monday came on the eve of a scheduled Delaware chancery court trial that threatened to cast an unflattering light on Google co-founders Larry Page and Sergey Brin.

The class-action by the Brockton Retirement Board in Massachusetts and another Google shareholder, Philip Skidmore, alleged that Page and Brin engineered the stock split in a way that unfairly benefits them while shortchanging the rest of the company's shareholders.

Google denied the allegations and maintained that the proposed stock split announced 14 months ago would benefit shareholders by ensuring that Page and Brin would preserve the power that has enabled them to make the same kinds of bold bets on technology that has helped increase the company's market value by more than $260 billion during the past nine years.

The split calls for a new class of "C'' stock with no voting power to be issued for each share of an existing category of "A'' voting stock. The structure is designed to ensure that Page and Brin retain control over the company, even though they only currently own about 15 percent of Google's outstanding stock, combined.

Page, Google's CEO, and Brin, an executive who oversees special projects in the company's secret X Lab, hold 56 percent of Google's voting power through a "B'' class of stock that gives them 10 votes per share. By creating a new class of non-voting shares, Google will be able to keep rewarding other employees with more stock and financing potential acquisitions of stock without undermining the voting power of Page and Brin.

The co-founders began pushing for the stock split three years ago, according to court and regulatory documents. Google shareholders approved the split a year ago, but the lawsuit had prevented the company from issuing the new shares.

The settlement still requires final court approval after shareholders have an opportunity to file any further objections. That means it will be at least several more weeks before the split can occur.

The legal truce will require Google Inc. to compensate owners of the new class of if stock if it's worth less than the existing class of stock after one year of trading. If the Class C stock is one percent to five percent below the price of the Class A shares, investors will receive a fraction of the difference in cash or additional Google stock. The maximum payments will be made if Class C stock lags the Class A price by five percent or more.

Google's Class A shares rose $11.21 Monday to close at $886.25. Based on that price, the Class C stock would have to be trading at $841.94 or lower to receive the maximum payment outlined in the settlement. In this scenario, the Class C stockholders would receive $44.31 per share.

If the split takes place, the trading price of Google's stock will probably fall dramatically to reflect a nearly doubling in outstanding shares. Google is expected to issue more than 271 million C shares, based on how many Class A shares were outstanding as of April 18.

Google, which is based in Mountain View, Calif., is betting there won't be a substantial gap between the trading prices of the Class A and Class C shares because investors backing the company have always known Page and Brin had the power to trump all other shareholders. That arrangement seems to have worked out well, given that Google's A shares have risen 10-fold from their initial public offering price of $85.

Another provision of the settlement requires Google's board to do a special review assessing how Class A shareholders will be affected if a future company acquisition is financed with more than 10 million shares of Class C stock.

Google Wants to Release Details on Classified Requests

SAN FRANCISCO — Google on Tuesday asked the government for permission to reveal details about the classified requests the technology company receives for the personal information of foreign users.

News from the technology industry, including start-ups, the Internet, enterprise and gadgets.
On Twitter: @nytimesbits.

It is the first time that Google has publicly acknowledged that it has received requests under the Foreign Intelligence Surveillance Act, which forbids companies from acknowledging the existence of requests or revealing any details about them. The technology company added that it complies with far fewer of these requests than it receives.

Google made the request after revelations of the National Security Agency’s secret surveillance program, known as Prism. The data the government collects as part of Prism – including email messages, telephone records and online chats -- is legally authorized by FISA.

Google made the request in a letter from David Drummond, Google’s chief legal officer, to Eric H. Holder, the attorney general, and Robert S. Mueller, the director of the F.B.I.

In the letter, Mr. Drummond expressed frustration that the company has been unable, because of a government gag order, to explain the details of how it shares user data with the government. He asked for permission to publish both the number of national security requests, including FISA disclosures, that Google receives, and their scope.

“Google’s numbers would clearly show that our compliance with these requests falls far short of the claims being made,” Mr. Drummond wrote. “Google has nothing to hide.”

Mr. Drummond was unavailable for an interview. In a statement, Leslie Miller, a Google spokeswoman, said that of Google’s hundreds of millions of users worldwide, “only a tiny fraction” are subject to government data requests each year.

“If we could publish those numbers openly, as we are asking, they would show that our compliance with these national security requests falls far short of the claims being made,” Ms. Miller said.

Bits Blog: Google Expands Its Boundaries, Buying Waze for $1 Billion

A screen shot of the Android version of Waze, a social mapping service used by millions of drivers around the world.

6:55 p.m. | Updated

Google announced on Tuesday that it had closed its deal to buy Waze, a social mapping start-up that features real-time traffic data provided by users to help drivers find the fastest route to a destination.

Google did not disclose the purchase price in its blog post announcing the acquisition. But a person with knowledge of the transaction said it was $1.03 billion.

The acquisition highlights the increasing importance of location data in our on-the-go lives, whether it is in finding a place to eat or navigating an unfamiliar road.

Waze has drawn a particularly passionate base of nearly 50 million users around the world. In any given month, about one-third of them turn on the app to access the company’s directions. Waze passively tracks their movements via GPS to generate live information about roads and traffic. And users can add their own information about accidents, police speed traps and road hazards.

Google said Waze would remain separate from its own Maps service. Some of Waze’s real-time traffic data will feed into Google Maps, however, and Google plans to incorporate its powerful search capabilities into Waze.

“We’ll also work closely with the vibrant Waze community, who are the DNA of this app, to ensure they have what’s needed to grow and prosper,” Brian McClendon, the Google vice president responsible for its geographic products, said in the post.

Google and Waze declined to make any executives available for an interview.

But in his own blog post, Waze’s chief executive, Noam Bardin, said, “Nothing practical will change here at Waze. We will maintain our community, brand, service and organization — the community hierarchy, responsibilities and processes will remain the same.”

Mr. Bardin indicated that he and other Waze employees planned to remain with the company. Its product development team will remain in Israel, where Waze has most of its operations.

An earlier version of this post misspelled the surname of Waze’s chief executive. He is Noam Bardin, not Noah Bardin.

State of the Art: 3 Ways Feedly Outdoes the Vanishing Google Reader

On July 1, it will take away Google Reader. To the dismay of millions, that service will go the way of Google Answers, Google Buzz, iGoogle and GOOG-411. Google hasn’t provided much in the way of a satisfying reason for this “spring cleaning,” saying only that “usage has declined.”

This column is intended to help two kinds of people: Those who used Google Reader, and those who never even knew what it is.

Google Reader is what’s called, somewhat geekily, a newsreader, or painfully geekily, an RSS aggregator.

It’s like an online newspaper you assemble yourself from Web pages all over the world. Instead of sitting down at your desk each morning and visiting each of your favorites sites in turn — say, NYtimes.com, Reddit.com and HuffingtonPost.com — you just open reader.google.com. There, you find a tidy list of all the new articles from all of those sources, organized like an e-mail Inbox. You skim the headlines, you read summaries, you click the ones that seem worth reading.

Occasionally, you can read the entire article without leaving the newsreader page; that’s up to whoever published the article. Usually, though, you see the headline of each item and a quick description of the article, or maybe the first few paragraphs and an accompanying picture.

One click takes you to the originating Web site. It’s all much faster and more efficient than wading through the ads, the blinking and the less interesting articles on the originating Web sites themselves.

There was a huge outcry when Google announced the imminent death of Reader — petitions, blogs, the works — but you might not immediately understand why. Google Reader is notoriously ugly. It’s fairly complicated and busy.

It is, however, complete, customizable and convenient. And once you’ve set up your preferred sources of reading material, they show up identically on every computer, tablet and phone. The masses may not have used Reader or even heard of it, but information devotees, news hounds and tech followers loved it.

They needn’t mourn. Google Reader has plenty of rivals and satisfying replacements. In fact, I fully intended to offer capsule reviews of each of them, until I realized that six presidential administrations would pass by the time I finished.

Newsreaders are available for every kind of phone, tablet and computer: Bloglines, NewsBlur, Pulse, Taptu, Reeder, FeedDemon, Spundge, Good Noows, HiveMined, Prismatic, Netvibes, NetNewsWire, ManagingNews and so on. Some are Web pages like Google Reader; others are stand-alone programs or apps. Some e-mail programs can subscribe to these feeds, too, dropping them right into your Inbox.

The one everybody keeps saying is the natural heir to Google Reader, though, is Feedly.com. In fact, Feedly says the ranks of its four million users have swelled to seven million since Google’s Reader death sentence was announced.

It requires a free plug-in for the Firefox, Chrome and Safari browsers. Three factors in particular make it useful.

First, the biggie: Simply logging into Feedly with your Google name and password instantly re-creates your Google Reader setup. All of your news sources, favorites and tags — category names that you can apply to certain articles, for ease in rounding them up later — magically show up in Feedly, ready to use. The synchronization is two-way; until July 1, you can bounce between Reader and Feedly to your heart’s content, and your newsreader worlds will look identical.

(Behind the scenes, Feedly relies, believe it or not, on Google Reader’s feeds. But the company says it will seamlessly replace Google’s feeds with its own source by July 1.)

Second, Feedly is much nicer-looking than Google Reader. It does a better job with typography — Google does no job at all — the layout is more attractive, and it offers more views of your news.

For example, Feedly can display your feeds exactly the way Google does, in a text-only list; click something in the list to expand and read it right there in the list. But it can also display your articles in much more visual ways. There’s Magazine view (a list of descriptive blurbs, each with a small photo next to it); Cards view (photo and blurb appear on what looks like playing cards filling the screen); and Full Articles view (you don’t have to click to expand anything — each scrolling vertical block shows as much of the article as is available).

Disruptions: Disruptions: Google Flu Trends Shows Problems of Big Data Without Context

Erik S. Lesser/European Pressphoto Agency Google’s Flu Predictor overestimated how many people had the flu this flu season.

Several years ago, Google, aware of how many of us were sneezing and coughing, created a fancy equation on its Web site to figure out just how many people had influenza. The math works like this: people’s location + flu-related search queries on Google + some really smart algorithms = the number of people with the flu in the United States.

So how did the algorithms fare this wretched winter? According to Google Flu Trends, at the flu season’s peak in mid-January, nearly 11 percent of the United States population had influenza.

Yikes! Take vitamins. Don’t leave the house. Wash your hands. Wash them again!

But wait. According to an article in the science journal Nature, Google’s disease-hunting algorithms were wrong: their results were double the actual estimates by the Centers for Disease Control and Prevention, which put the coughing and sniffling peak at 6 percent of the population.

Kelly Mason, a public affairs spokeswoman for Google, said the company’s Flu Trends site was meant to be only one source in addition to the C.D.C. and other flu surveillance methods. “We review and potentially update our model each season,” she said.

Scientists have a theory about what went wrong, as well.

“Several researchers suggest that the problems may be due to widespread media coverage of this year’s severe U.S. flu season,” Declan Butler wrote in Nature. Then add social media, which helped news of the flu spread quicker than the virus itself.

In other words, Google’s algorithm was looking only at the numbers, not at the context of the search results.

In today’s digitally connected world, data is everywhere: in our phones, search queries, friendships, dating profiles, cars, food, reading habits. Almost everything we touch is part of a larger data set. But the people and companies that interpret the data may fail to apply background and outside conditions to the numbers they capture.

“Data inherently has all of the foibles of being human,” said Mark Hansen, director of the David and Helen Gurley Brown Institute for Media Innovation at Columbia University. “Data is not a magic force in society; it’s an extension of us.”

Society has encountered similar situations for centuries. In the 1600s, Dr. Hansen said, an early census was recorded in England as the Great Plague of London killed tens of thousands of Britons. To calculate the spread of the disease, officials started recording every christening and death in the city. And although this helped quantify the mortality rate, it also created other problems. There was now an astounding collection of statistical information for scientists to review and understand, but it took time to develop systems that could accurately assess the information.

Now, as we enter a world of big data, we have to learn how to apply context to these numbers.

Dr. Hansen said the problem of data without context could be summed up in a quote from the playwright Eugène Ionesco: “Of course, not everything is unsayable in words, only the living truth.”

I experienced this firsthand in the spring of 2010, when I was an adjunct professor at New York University teaching graduate students in the Interactive Telecommunications Program.

I created a class called “Telling Stories With Data, Sensors and Humans,” with the goal of determining whether sensors and data could become reporters and collect information. Students built little electronic contraptions with $30 computers called Arduinos, and attached several sensors, including ones that could detect light, noise and movement.

We wondered if we could use these sensors to determine whether students used the elevators more than the stairs, and whether that changed throughout the day. (Esoteric, sure, but a perfect example of a computer sitting there taking notes, rather than a human.)

We set up the sensors in some elevators and stairwells at N.Y.U. and waited. To our delighted surprise, the data we collected told a story, and it seemed that our experiment had worked.

As I left campus that evening, one of the N.Y.U. security guards who had seen students setting up the computers in the elevators asked how our experiment had gone. I explained that we had found that students seemed to use the elevators in the morning, perhaps because they were tired from staying up late, and switch to the stairs at night, when they became energized.

“Oh, no, they don’t,” the security guard told me, laughing as he assured me that lazy college students used the elevators whenever possible. “One of the elevators broke down a few evenings last week, so they had no choice but to use the stairs.”

E-mail: bilton@nytimes.com

Google Apps Moving Onto Microsoft’s Business Turf

Google’s software for businesses, Google Apps, consists of applications for document writing, collaboration, and text and video communications — all cloud-based, so that none of the software is on an office worker’s computer. Google has been promoting the idea for more than six years, and it seemed that it was going to appeal mostly to small businesses and tech start-ups.

But the notion is catching on with larger enterprises. In the last year Google has scored an impressive string of wins, including at the Swiss drug maker Hoffmann-La Roche, where over 80,000 employees use the package, and at the Interior Department, where 90,000 use it.

One big reason is price. Google charges $50 a year for each person using its product, a price that has not changed since it made its commercial debut, even though Google has added features. In 2012, for example, Google added the ability to work on a computer not connected to the Internet, as well as security and data management that comply with more stringent European standards. That made it much easier to sell the product to multinationals and companies in Europe.

Many companies that sell software over the cloud add features without raising prices, but also break from traditional industry practice by rarely offering discounts from the list price.

Microsoft’s Office suite of software, which does not include e-mail, is installed on a desktop PC or laptop. In 2013, the list price for businesses will be $400 per computer, but many companies pay half that after negotiating a volume deal.

At the same time, Microsoft has built its business on raising prices for extra features and services. The 2013 version of Office, for example, costs up to $50 more than its predecessor.

“Google is getting traction” on Microsoft, said Melissa Webster, an analyst with IDC. “Its ‘good enough’ product has become pretty good. It looks like 2013 is going to be the year for content and collaboration in the cloud.”

Microsoft has also jumped on the office-in-the-cloud trend. In June 2011, it released Office 365, and now offers its software in both a cloud version and a hybrid version that uses cloud computing and conventional servers. Office 365 starts at a list price of $72 a year, per person, and can cost as much as $240 a person annually, in versions that offer many more features and software development capabilities. Microsoft says it offers more than Google for the money, but the product has not won many converts from Google.

In a recent report, Gartner, the information technology research company, called Google “the only strong competitor” to Microsoft in cloud-based business productivity software, though it warned that “enterprise concerns may not be of paramount importance to the search giant.”

Google is tight-lipped about how many people use Google Apps, saying only that in June more than five million businesses were using it, up from four million in late 2011. Almost all these companies are tiny, but in early December Google announced that even companies with fewer than 10 employees, which used to get Google Apps free, would have to pay.

Google’s revenue from Apps, according to a former executive who asked not to be named in order to maintain good relations with Google, amounted to perhaps $1 billion of the $37.9 billion Google earned in 2011.

Shaw Industries, a carpet maker in Dalton, Ga., with about 30,000 employees, switched to Google Apps this year for communication tools like e-mail and videoconferencing. Jim Nielsen, the company’s manager of enterprise technology, calculated that using Google instead of similar Microsoft products would cost, over seven years, about one-thirteenth Microsoft’s price.

Shaw is a subsidiary of Berkshire Hathaway, run by Warren E. Buffett, but the close friendship of Mr. Buffett and Microsoft’s founder, Bill Gates, did not sway Mr. Nielsen. “When you add it up, the numbers are pretty compelling,” he said.

In addition to the lower price, Google has simplicity in pricing. Mr. Nielsen said he had to sort through 11 pricing models to figure out what he would pay Microsoft.

Italian Appeals Court Acquits 3 Google Executives in Privacy Case

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Google Wins Time From Europe’s Antitrust Enforcer

After meeting with Eric E. Schmidt, Google’s executive chairman, the antitrust official, Joaquín Almunia, said in a statement Tuesday that “we have substantially reduced our differences.”

“I now expect Google to come forward with a detailed commitment text in January 2013,” said Mr. Almunia, the E.U. competition commissioner.

The meeting between Mr. Almunia and Mr. Schmidt came as regulators in the United States appeared to be backing away from what had initially been one of the centerpieces of an antitrust investigation on both sides of the Atlantic. Early on, regulators focused on a question that drilled to the core of Google’s business model: whether its popular Web search engine thwarted competition by favoring the company’s services in presenting results of search queries.

Recent accounts of the U.S. proceedings indicate American officials are no longer pressing the search-ranking issue. But Mr. Almunia is evidently continuing to hold Google accountable on that. He said Tuesday that in their discussion, the company indicated it would make changes in “the way in which Google’s vertical search services are displayed within general search results as compared to services of competitors.”

The other areas in which Mr. Almunia expected to reach a deal included the ways Google uses and displays content from other companies in its search tool, and the restrictions that Google places on advertising and advertisers. Any concessions offered by Google would be tested in the marketplace to assess their acceptability to other companies, Mr. Almunia said, before becoming binding.

If Mr. Almunia accepts a settlement offer, Google would avoid a possible fine of as much as 10 percent of its annual global revenue, about $37.9 billion last year. It would also avoid a guilty finding that could restrict its activities in Europe. “We continue to work cooperatively with the commission,” said Al Verney, a Google spokesman in Brussels.

Exactly what concessions on search services that Mr. Almunia can wring from Google remained an open question Tuesday, though antitrust experts agreed that he had more leverage than his U.S. counterparts.

While Google is the dominant search engine in the United States, it holds even greater sway in Europe, accounting for more than 90 percent of searches in a number of major markets. That is one factor giving the Europeans greater leverage in trying to set rules on how Google ranks competing services.

Another factor is European antitrust law, which has long given competitors more protection than U.S. law provides.

Antitrust law in Europe, and the commission’s approach to it, has shifted in recent years, raising the hurdles for complainants against dominant companies, said Emanuela Lecchi, an antitrust partner in London with the law firm Watson, Farley & Williams.

Even so, she said, Europe still offers rivals greater protection. Compared with the United States, Ms. Lecchi said, European regulators “are more inclined to try and make sure there is always a choice of players on markets, and that’s something that might allow Google’s rivals to make more progress at the end of the day.”

Some experts said the U.S. Federal Trade Commission could be playing a tactically clever hand by allowing the Europeans to push Google an extra mile. They suggested that the F.T.C. would be shielded from accusations it was attacking a U.S. champion, even though any concessions Google made to the Europeans on search were likely to apply globally anyway.

“The F.T.C. may be seen as outsourcing the more difficult parts of this investigation to another agency,” said Andreas Stargard is a competition lawyer and antitrust litigator in Brussels with the firm Paul Hastings. Besides, Mr. Stargard said, “the F.T.C. isn’t as expert in these complex antitrust matters as it used to be.”

As the scope of the U.S. investigation showed signs of narrowing in recent days, groups concerned about Google’s behavior, especially in online search, have been calling on the Europeans to ensure that any decision in the case would give them a better chance to challenge Google’s market share in areas like mapping and travel.

“It’s all very well dealing with the manifestations of abuses, but what the market really wants to know is how we get competition back into search,” David Wood, the legal counsel for ICOMP, an industry group based in Europe that includes Microsoft among its members, said Tuesday.

Earlier in the week, FairSearch, a group with most of its member companies in the United States and Europe, and that also includes Microsoft, asserted in a statement that “Google dominates more than 93 percent of the search market” in Europe. FairSearch urged Mr. Almunia to take the opportunity to “build on a record of leadership in global antitrust enforcement” by pressing Google for more concessions than in the United States.

Steve Lohr contributed reporting from New York.

Microsoft Battles Google by Hiring Political Brawler Mark Penn

SEATTLE — Mark Penn made a name for himself in Washington by bulldozing enemies of the Clintons. Now he spends his days trying to do the same to Google, on behalf of its archrival Microsoft.

Since Mr. Penn was put in charge of “strategic and special projects” at Microsoft in August, much of his job has involved efforts to trip up Google, which Microsoft has failed to dislodge from its perch atop the lucrative Internet search market.

Drawing on his background in polling, data crunching and campaigning, Mr. Penn created a holiday commercial that has been running during Monday Night Football and other shows, in which Microsoft criticizes Google for polluting the quality of its shopping search results with advertisements. “Don’t get scroogled,” it warns. His other projects include a blind taste test, Coke-versus-Pepsi style, of search results from Google and Microsoft’s Bing.

The campaigns by Mr. Penn, 58, a longtime political operative known for his brusque personality and scorched-earth tactics, are part of a broader effort at Microsoft to give its marketing the nimbleness of a political campaign, where a candidate can turn an opponent’s gaffe into a damaging commercial within hours. They are also a sign of the company’s mounting frustration with Google after losing billions of dollars a year on its search efforts, while losing ground to Google in the browser and smartphones markets and other areas.

Microsoft has long attacked Google from the shadows, whispering to regulators, journalists and anyone else who would listen that Google was a privacy-violating, anticompetitive bully. The fruits of its recent work in this area could come next week, when the Federal Trade Commission is expected to announce the results of its antitrust investigation of Google, a case that echoes Microsoft’s own antitrust suit in the 1990s. A similar investigation by the European Union is also wrapping up. A bad outcome for Google in either one would be a victory for Microsoft.

But Microsoft, based in Redmond, Wash., has realized that it cannot rely only on regulators to scrutinize Google — which is where Mr. Penn comes in. He is increasing the urgency of Microsoft’s efforts and focusing on their more public side.

In an interview, Mr. Penn said companies underestimated the importance of policy issues like privacy to consumers, as opposed to politicians and regulators. “It’s not about whether they can get them through Washington,” he said. “It’s whether they can get them through Main Street.”

Jill Hazelbaker, a Google spokeswoman, declined to comment on Microsoft’s actions specifically, but said that while Google also employed lobbyists and marketers, “our focus is on Google and the positive impact our industry has on society, not the competition.”

In Washington, Mr. Penn is a lightning rod. He developed a relationship with the Clintons as a pollster during President Bill Clinton’s 1996 re-election campaign, when he helped identify the value of “soccer moms” and other niche voter groups.

As chief strategist for Hillary Clinton’s unsuccessful 2008 campaign for president, he conceived the “3 a.m.” commercial that raised doubts about whether Barack Obama, then a senator, was ready for the Oval Office. Mr. Penn argued in an essay he wrote for Time magazine in May that “negative ads are, by and large, good for our democracy.”

But his approach has ended up souring many of his professional relationships. He left Mrs. Clinton’s campaign after an uproar about his consulting work for the government of Colombia, which was seeking the passage of a trade treaty with the United States that Mrs. Clinton, then a senator, opposed.

“Google should be prepared for everything but the kitchen sink thrown at them,” said a former colleague who worked closely with Mr. Penn in politics and spoke on condition of anonymity. “Actually, they should be prepared for the kitchen sink to be thrown at them, too.”

Hiring Mr. Penn demonstrates how seriously Microsoft is taking this fight, said Michael A. Cusumano, a business professor at M.I.T. who co-wrote a book about Microsoft’s browser war.

“They’re pulling out all the stops to do whatever they can to halt Google’s advance, just as their competition did to them,” Professor Cusumano said. “I suppose that if Microsoft can actually put a doubt in people’s mind that Google isn’t unbiased and has become some kind of evil empire, they might very well get results.”

Nick Wingfield reported from Seattle and Claire Cain Miller from San Francisco.

Microsoft Battles Google by Hiring Political Brawler Mark Penn

SEATTLE — Mark Penn made a name for himself in Washington by bulldozing enemies of the Clintons. Now he spends his days trying to do the same to Google, on behalf of its archrival Microsoft.

Since Mr. Penn was put in charge of “strategic and special projects” at Microsoft in August, much of his job has involved efforts to trip up Google, which Microsoft has failed to dislodge from its perch atop the lucrative Internet search market.

Drawing on his background in polling, data crunching and campaigning, Mr. Penn created a holiday commercial that has been running during Monday Night Football and other shows, in which Microsoft criticizes Google for polluting the quality of its shopping search results with advertisements. “Don’t get scroogled,” it warns. His other projects include a blind taste test, Coke-versus-Pepsi style, of search results from Google and Microsoft’s Bing.

The campaigns by Mr. Penn, 58, a longtime political operative known for his brusque personality and scorched-earth tactics, are part of a broader effort at Microsoft to give its marketing the nimbleness of a political campaign, where a candidate can turn an opponent’s gaffe into a damaging commercial within hours. They are also a sign of the company’s mounting frustration with Google after losing billions of dollars a year on its search efforts, while losing ground to Google in the browser and smartphones markets and other areas.

Microsoft has long attacked Google from the shadows, whispering to regulators, journalists and anyone else who would listen that Google was a privacy-violating, anticompetitive bully. The fruits of its recent work in this area could come next week, when the Federal Trade Commission is expected to announce the results of its antitrust investigation of Google, a case that echoes Microsoft’s own antitrust suit in the 1990s. A similar investigation by the European Union is also wrapping up. A bad outcome for Google in either one would be a victory for Microsoft.

But Microsoft, based in Redmond, Wash., has realized that it cannot rely only on regulators to scrutinize Google — which is where Mr. Penn comes in. He is increasing the urgency of Microsoft’s efforts and focusing on their more public side.

In an interview, Mr. Penn said companies underestimated the importance of policy issues like privacy to consumers, as opposed to politicians and regulators. “It’s not about whether they can get them through Washington,” he said. “It’s whether they can get them through Main Street.”

Jill Hazelbaker, a Google spokeswoman, declined to comment on Microsoft’s actions specifically, but said that while Google also employed lobbyists and marketers, “our focus is on Google and the positive impact our industry has on society, not the competition.”

In Washington, Mr. Penn is a lightning rod. He developed a relationship with the Clintons as a pollster during President Bill Clinton’s 1996 re-election campaign, when he helped identify the value of “soccer moms” and other niche voter groups.

As chief strategist for Hillary Clinton’s unsuccessful 2008 campaign for president, he conceived the “3 a.m.” commercial that raised doubts about whether Barack Obama, then a senator, was ready for the Oval Office. Mr. Penn argued in an essay he wrote for Time magazine in May that “negative ads are, by and large, good for our democracy.”

But his approach has ended up souring many of his professional relationships. He left Mrs. Clinton’s campaign after an uproar about his consulting work for the government of Colombia, which was seeking the passage of a trade treaty with the United States that Mrs. Clinton, then a senator, opposed.

“Google should be prepared for everything but the kitchen sink thrown at them,” said a former colleague who worked closely with Mr. Penn in politics and spoke on condition of anonymity. “Actually, they should be prepared for the kitchen sink to be thrown at them, too.”

Hiring Mr. Penn demonstrates how seriously Microsoft is taking this fight, said Michael A. Cusumano, a business professor at M.I.T. who co-wrote a book about Microsoft’s browser war.

“They’re pulling out all the stops to do whatever they can to halt Google’s advance, just as their competition did to them,” Professor Cusumano said. “I suppose that if Microsoft can actually put a doubt in people’s mind that Google isn’t unbiased and has become some kind of evil empire, they might very well get results.”

Nick Wingfield reported from Seattle and Claire Cain Miller from San Francisco.

Bits Blog: Like Apple, Google Now Has Devices That Come in Three Sizes

From top: the Nexus 4, Nexus 7 and Nexus 10.

With the addition of the iPad Mini, Apple offers touch-screen devices in three different sizes. Now its competitor Google is doing the same, introducing a 10-inch tablet, an upgraded seven-inch tablet and a new smartphone.

Introduced Monday, the Nexus 10, which Google developed with Samsung, is the company’s first tablet that competes directly with Apple’s 9.7-inch iPad. Most significantly, it undercuts the iPad’s price: a Nexus 10 with Wi-Fi and 16 gigabytes of storage costs $400, compared with $500 for an equivalent iPad. Google did not say whether a model with cellular data would be available.

Google’s Nexus 4 smartphone, which it developed with LG, has a 4.7-inch screen and wireless charging capability. Google highlighted its new camera software, called Photo Sphere, which allows a user to snap a picture up and down in different directions and stitch them together into a 360-degree view. (For comparison, the iPhone 5 has a four-inch screen and camera software that allows creation of a panoramic photo by panning left or right.) The phone starts at $200 with a T-Mobile contract, or $300 unlocked, without a contract.

Google also upgraded its Nexus 7 tablet, which was introduced this year, to include a cellular data connection called HSPA+, which is the predecessor to the newest cell technology, 4G LTE. The model with HSPA+ and 32 gigabytes of storage costs $300, and it is compatible with AT&T’s network.

All the devices include Google’s latest Android software, 4.2 Jelly Bean. Among its features, Jelly Bean includes Google Now, a personal assistant that keeps track of searches to do things like display the score of a favorite sports team, or provide updates on the status of an airline flight.

This post has been revised to reflect the following correction:

Correction: October 29, 2012

An earlier version of this post misidentified the company that Google worked with to create the Nexus 10. It was Samsung, not LG. Thanks to commenter Joie2 for spotting the error.

F.T.C. Staff Prepares Antitrust Case Against Google Over Search

The government’s escalating pursuit of Google is the most far-reaching antitrust investigation of a corporation since the landmark federal case against Microsoft in the late 1990s. The agency’s central focus is whether Google manipulates search results to favor its own products, and makes it harder for competitors and their products to appear prominently on a results page.

The staff recommendation is in a detailed draft memo of more than 100 pages that is being shared with the five F.T.C. commissioners, said two people briefed on the inquiry.

The memo is still being edited and changes could be made, but these are mostly fine-tuning and will not alter the broad conclusions reached after an inquiry that began more than a year ago, said these people, who spoke on the condition that they not be identified.

Google said in a statement on Friday, “We are happy to answer any questions that regulators have about our business.” In the past it has said many times that “competition is a click away.”

The commission is also building a team to take Google to court, if it comes to that. Last spring, it hired a seasoned litigator to help with the case, Beth A. Wilkinson, a partner in the firm Paul, Weiss in Washington. In a further sign that it means business, last week it brought on a well-known economist as a consultant: Richard Gilbert of the University of California, Berkeley.

The F.T.C. staff memo does not mean that the government will sue Google for antitrust violations. Next, the vote of three of the five F.T.C. commissioners would be required. And each step is a further prod for Google to make concessions to reach a settlement before going to court. Last month, Jon Leibowitz, chairman of the F.T.C., said a final decision on whether to sue Google would be made before the end of this year.

The Google investigation echoes the Microsoft case in a basic way. Google, like Microsoft in the personal computer industry, has drawn complaints from rivals and antitrust regulators as it has expanded its business beyond its dominant product, search and search advertising. Google has aggressively built off this main business to fields including online commerce and smartphone software.

As it expands its empire, Google takes on new competitors and brings formidable resources. Rivals may suffer, Google says, but the company is improving its products and services, benefiting consumers and the economy.

The American inquiry is moving in tandem with a major antitrust investigation in Europe. The European authorities are pressing ahead and seeking changes in Google’s behavior.

Speaking in New York last month, Joaquín Almunia, the European Union’s competition commissioner, pointed to antitrust regulators’ concerns that Google is “using its dominance in online search to foreclose rival specialized search engines and search advertisers.”

Google is also being investigated by the attorneys general of six states: Texas, Ohio, New York, California, Oklahoma and Mississippi.

Given the momentum of the investigations, antitrust experts say, the F.T.C. staff recommendation was to some extent expected.

The F.T.C. investigators have looked at a wide range of Google’s business practices, according to companies that have been questioned and received subpoenas from the agency.

The areas of inquiry include accusations of manipulating the search results it displays to favor Google commerce services it has developed like Google Shopping for buying goods and Google Places for advertising local restaurants and businesses. In the civilian subpoenas, the F.T.C. calls this “preferencing.”

The investigators are also looking into whether Google’s automated advertising marketplace, AdWords, discriminates against advertisers from competing online commerce services like comparison shopping sites and consumer review Web sites.

Claire Cain Miller and Edward Wyatt contributed reporting.