In 2006, Google went to bat to protect consumer data privacy in the United States but was criticized for bowing to government pressure in China after it released a censored version of its Chinese Web search site.

For years, privacy advocates have warned that consumer data on the Web is threatened by overzealous law enforcement types, and this fear was realized publicly in early 2006. Google was the only one of the major Internet search engines to challenge a federal subpoena seeking search records.

Federal prosecutors said they needed the data on searched terms and Web sites crawled, but a judge later said search queries were off-limits and halved the number of Web addresses in the Google index that the search giant would have to release.

Meanwhile, Google launched versions of its search and news Web sites in China that censor material deemed objectionable to authorities there, reasoning that giving limited access to content is better than no access.

The United Nations blasted Cisco Systems, Google, Yahoo and Microsoft for cooperating with the Chinese government, as did members of the U.S. Congress and Amnesty International. Singled out for the harshest attacks was Yahoo, which is accused of providing Web data that led to the conviction of a journalist in China and the arrest of at least one other Chinese citizen.

In August, AOL inadvertently released on the Web the search histories of more than 650,000 of its subscribers for a three-month period. Although the users were anonymous, the searches--many of them highly sensitive in nature--were detailed enough as to be able to be tied back to the searcher.

Google continued its buying spree, acquiring Web word-processing company Upstartle, JotSpot, which offers technology that lets people build collaborative Web pages called wikis and radio advertising company DMarc Broadcasting, among others.

But the company's biggest acquisition to date was its $1.65 billion stock purchase of video-sharing Web site YouTube. Google also pledged to pay $900 million to News Corp.'s MySpace.com in exchange for search and advertising listings on the popular social-networking site.

Google was also sued over click fraud in a case that settled for $90 million. And it was sued over trademark issues in search-related ads. One such suit filed by Rescuecom was dismissed, while a French court ruled against Google in another such suit, filed by Louis Vuitton Malletier.

Google also was sued by Belgian publishers who claim its linking to their news stories on Google News violates copyright. Google settled with suing journalists and photographers groups, but Copiepresse, a group representing French- and German-language newspapers in Belgium, is still pressing its case.

Google continued to parlay its dominance in the search market into profits, while its closest rival, Yahoo, saw its third-quarter earnings fall from a year ago. Google's stock rose steadily throughout the year, finally surpassing $500 a share in late November, before pulling back a bit.

--Elinor Mills

2006 Highlights

Feds take porn fight to Google

Bush administration subpoenas records of all searches over one week as it defends disputed antiporn law.

Google co-founders cash in

Google's triumvirate have made billions off stock sales since company went public, but there's still a lot more where that came from.

No booze or jokes for Googlers in China

In its move to comply with Chinese laws, the search giant filters out a wide range of sites beyond those critical of Beijing.

EarthLink, Google team in S.F. Wi-Fi bid

Free-service proposal is one of six proposals San Francisco received for providing citywide Wi-Fi network.

Google Spreadsheets turns up heat on Excel

Web-based program puts search giant in even more competition with rival Microsoft.

Google loses French trademark lawsuit

Appeals court affirms lower court ruling that Google infringed trademark by selling keyword ads using word "Vuitton."

Google Checkout checks in

Going shopping online? The search giant wants to sell you on its new payment plan.

Google joins Xerox as a verb

Yahoo may need a Band-Aid or a Kleenex. Its rival has been officially ensconced in Merriam-Webster's--and the OED.

Google rides the radio waves

Wants to sell radio spots through automated auction platform. The ads are now playing in Detroit.

Google click fraud settlement given go-ahead

Arkansas judge rejects a challenge claiming that a $90 million settlement with affected advertisers is inadequate.

AOL apologizes for release of user search data

Search log information originally intended for use on new research site; company calls data posting a mistake.

Google pledges $900 million for MySpace honors

When the kids on MySpace search the Net and see the ads served up, they'll have Google to thank.

Google makes video play with YouTube buy

YouTube will operate independently and the companies will work together on building new features.

Is Google worth its weight in gold?

As its stock price nears $500, strong growth opportunities in online advertising make Google worth every penny, analysts say.