from spywareinfo.com
Is The Google Toolbar Spyware?
From time to time, someone asks why the Google search bar is not targeted as spyware. It works similarly to other toolbars which are targeted as spyware (Comet Cursor, Search-Explorer, Alexa, etc) by Ad-aware, Spybot, Aluria, and other spyware removal tools. Jamie Rosen, founder of Cometsystems (Comet Cursor) had this to say about it while trying to make the case that Comet Cursor should no longer be targeted by Ad-aware:
Google has a feature in its toolbar called page rank that ranks pages as you visit them. Not surprisingly, it requires the software to send every url you visit to google. That sounds alarming. But so long as you can turn it off and so long as the company makes it clear that it's not saving this information to profile you, it isn't necessarily an insidious thing. Some users want these so-called connected services -- they can be quite cool and useful.
Let me explain what is different about the Google toolbar that keeps it from being targeted as spyware like many other third party toolbars. Google uses its page rank system to make its search engine more useful, as opposed to using it to gather information about you to sell you tailored advertisements. You are not a source of income to Google.com, except as a site visitor looking at the same ads everyone else sees, toolbar or no toolbar.
Google goes to great lengths to explain that, in their own words, there may be privacy issues with some of the features, and provides an alternate download where those features are disabled. You have to go out of your way to find and activate those features. Contrast this behavior to some other toolbar makers who use activex to spread like trojans, gather statistical data on the user to present them with "more relevent special offers", forcibly reset browser settings, and make it damned hard to remove.
Google does make money on it in a roundabout way, because these features make their search engine more accurate and useful, which makes more people likely to use it and click the ads they sell on the site. The ads, by the way, are determined by the keywords you search for, NOT where you've been surfing, unlike many of the other toolbars. You'd see the same ads with or without the toolbar installed.
So, is the Google toolbar spyware? No, it is not.