Google is in damage control mode over a clause in the user agreements for its Google Docs and Spreadsheets applications that implies an inordinate degree of power over the content that runs over its services.

The clause reads: "By submitting, posting or displaying Content on or through Google services which are intended to be available to the members of the public, you grant Google a worldwide, nonexclusive, royalty-free license to reproduce, adapt, modify, publish and distribute such content on Google services for the purpose of displaying, distributing and promoting Google services."

This matters more because it's Google, of course, but the issue may be an important one for other online software companies to watch as they seek to build credibility and support among business customers. Most of the controversy centers around the firm's use of the word "public." If you're posting it on Google Docs or in Google spreadsheets, the implication goes, it's up for grabs if the company needs some sample use cases for its next advertising campaign.

You really have to stretch yourself to think about how this kind of scenario would play itself out. Might Google use various Docs and Spreadsheets customer's data as case study material? Or perhaps reproduce them in the kind of print magazine ads that it never, ever buys (and why would they, when we give the company this kind of constant media attention)? Maybe we should be paying more attention to the word "modify," in the clause, which might give Google the go-ahead to insert references to its services in the actual content ("Here's today's sales report. I finished it using Google Spreadsheets®!").

I can't think of a better way to lose customers. And whatever you think about the firm's market cap or long-term investment value, Google is still a bit player in the applications space. It can't afford to outrage users that way. We should also realize that legal mumbo-jumbo aside, we all take a huge leap of faith when we use online program like these. Google could easily "reproduce, adapt, modify, publish, and distribute" whatever it wants. That may be why few are entrusting it with highly sensitive company material. It's not that anything bad has happened, it's that nothing bad has happened yet.

Docs and Speadsheets, and their many other budding online rivals, are allowing unprecedented degrees of collaboration, which is why our notion of "public" may be so confused. This is exacerbated by the fact that we often use the same online tools for both work and personal purposes. Both kinds of content have a "public," and there may even be some overlap between them, but the "public" of the wider world is another matter. In order for Web-based software to flourish, we need to engage in a more prolonged discussion with one another about the boundary lines between users, vendors, and everyday Internet surfers. It has to happen before content gets inadvertently (or advertently) misused. It's a discussion we have to make as public as possible.