They really weren't up front about it, they might have just not been hiding it very hard.
Part of the solution to the tech vs. privacy problems could be forcing companies to be actually up front about their business models. After all, it's not wrong for an individual to give up their data, after being informed about what is requested and what will be done with it. The wrong behavior is having a business model that depends on most customers not being aware their data is being mined and used against them.
To my mind, the biggest privacy violator that doesn't admit it's privacy violations right now is Apple. Even as a non-Apple user, I have my WiFi location slurped up by Apple, and they don't give me any way to opt out. People who use Apple devices have it far worse.
It was the answer to the main question everyone had, how are they providing 1GB (huge at the time) inbox space for FREE? Because they were serving relevant ads against your mail. It was in no way a secret.
What I remember are many products released around that time by Google, et al that were sold to us as: we're making gobs of money off of our core offering (e.g. search + little text-based ads), that we can afford to all this other stuff for the benefit of humanity. So much was sold as "making the world a better place". The other sales pitch we got amounted to, "don't worry about it, we'll monetize later."
Nobody was up-front in those days. Which is why not a month has gone by where ToS or Privacy Policy changes need another click to accept to keep using. The frog was certainly slow-boiled.
Here's one comment on slashdot: [0].
I have to laugh at this one [1]. It almost seems reversed these days (not quite, but kinda)
I'll see if I can dig up any press releases or official Google communications about it, but with linkrot what it is, it may take a while. (EDIT: Here's Google's privacy policy when Gmail was released [2])
[0] https://slashdot.org/comments.pl?sid=105335&cid=8965115
[1] https://slashdot.org/comments.pl?sid=105335&cid=8965194
[2] https://web.archive.org/web/20040404134002/http://gmail.goog...
The value proposition has changed but not in the way that was feared at the time. We're certainly inundated with ads to a greater degree than it was at the time. They never turned around and charged for it but they certainly require a lot more personal information to have an account these days.
There was so much hate for Microsoft but it was wishful thinking that Google would turn out differently.
But it was widely known and discussed at the time, and included in their policy on day one[0]. It was the plan to make 1GB work. It was their answer when people asked, skeptically, how they could make money giving away such unfathomable storage "for free".
And, as far as privacy policies go, that document is well organized and addresses the scanning in the very first section.
You don't have to trust my memory of this, but their above-board handling of keyword scanning in emails is not an example that illustrates how they will be evil with surreptitious voice recording on their other products.
[0] https://web.archive.org/web/20040404134002/http://gmail.goog...