Is Google taking privacy issues seriously enough?

While I can't imagine for a moment that Google is in danger of going out of business, with the searching masses marching elsewhere in dismay at various perceived privacy infringing issues. However, if you look at the media attention regarding just that, the privacy issue, then Google is going to have to start doing something to head off the bad press before the whole Do No Evil image gets tarnished with a brand stain that will not come off.