Exclusive: Regulations helped kill Google Reader, source says

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Google plans to kill the popular Reader service today -- and government over-regulation played a big role, according to a person familiar with the matter.

The service, which allows users to see new posts from their favorite blogs and websites all on one page, has been around since 2005 and has millions of users, so the decision to end the program left many wondering: why kill it?

'You would think that it would take little effort to maintain the site, but compliance keeps the cost up.'

— A source who has worked at Google

"You would think that it would take little effort to maintain the site, but compliance keeps the cost up," the source told FoxNews.com.

He gave one example of a costly regulation.

"In Europe they've had a regulation for years where basically, if someone requests that all their data on a site be deleted, the company must comply. Reader wasn't compliant with that. So it comes down to, do you spend a lot more resources making the service compliant, or working on something new?"

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The cost of complying with regulations can be high.

In Germany in 2010, Google got in trouble for its "street view" project, in which a Google truck drives on city streets and takes photos, which allows Google Maps users to zoom in and see what the street looks like from their computers.

German privacy laws allow anyone to opt out and require Google to eliminate images of their property from Google street view. To comply with that law, Google had to hire 200 people to sift through requests and scrub the requested images from the site.

In another case, Belgian and French newspapers sued Google for putting their articles in search results and showing snippets of the articles as previews. Litigation lasted for 6 years before a settlement was reached last year, in which Google agreed to cover the newspapers' legal fees.

Google spokeswoman Nadja Blagojevic declined to comment about whether regulatory costs played a role in Reader’s demise. Google's official statement on closing Reader only gave the reason: "usage of Google Reader has declined, and as a company we’re pouring all of our energy into fewer products."

Although Google would not comment on the cost of regulations, several job listings at Google allude to such costs.

“Innovating (and operating!) is increasingly complex when Googlers work in more than 50 countries, each with its own unique practices and regulations,” reads the job description for one position in the company’s compliance department.

But there were also non-regulatory costs that contributed to the decision to end the product, according to another source -- a former Google engineer who worked on the team that built Google Reader.

"The maintenance of a product like Google Reader would be substantial. Not only do you have the server costs; you need people to babysit the servers, be familiar with the code in order to fix bugs, undertake security work, regularly backup the data, integrate with other Google products (e.g. G+), etc,” he told FoxNews.com.

“As a programmer, switching a product off in these circumstances makes complete sense, even if it's painful to do.”

The author of the story can be reached at maxim.lott@foxnews.com or on twitter at @maximlott