After a veritable horde of criticism and complaints from various sources, including the Electronic Frontier Foundation, Google has admitted that version 3 of their indexing software Google Desktop has serious potential security risks. With the potential for information in the form of indexed documents being made available to third parties, the risk of identity theft, intellectual property theft, disclosure of secret information, et cetera, all rises.

Gartner said in a report on Thursday that the "mere transport (of data) outside the enterprise will represent an unacceptable security risk to many enterprises," as intellectual property could be transported out of the business. Google told ZDNet UK on Monday that it recognized the risk, and recommended that companies take action. "We recognize that this is a big issue for enterprise. Yes, it's a risk, and we understand that businesses may be concerned," said Andy Ku, European marketing manager for Google.
The particular feature in question is Search Across Computers, which allows files to be located from multiple machines with little fuss. Usually a company doesn't admit a problem until a fix is available, but Google's fix is to disable the feature. There is also an Enterprise version of Google Desktop 3, which is more tailored to environments where this sort of information leakage is a serious risk. At least Google is doing something about this.