Why? I don't think it's encrypted in such a way that Google can't read it. References?

I don't think you can trust Google with your chat and docs as well.

From:http://www.wired.com/threatlevel/2010/09/google-spy/

>Google acknowledged Wednesday that two employees have been terminated after being caught in separate incidents allegedly spying on user e-mails and chats.

>David Barksdale, 27, was fired in July after he reportedly accessed the communications of at least four minors with Google accounts, spying on Google Voice call logs, chat transcripts and contact lists, according to Gawker, which broke the story Wednesday.

http://gawker.com/5637234/gcreep-google-engineer-stalked-tee...

Shocking! You mean that nearly 3 years ago, a hosted service had employees that may have access to the databases of the services you're using?

The difference being that Google doesn't play at being encrypted end-to-end.

No, but it would win huge bonus points if it did, over other chat apps. I think we all know Google won't bring OTR encryption to Hangouts, though, which is most unfortunate.

That actually shows that Google has privacy policies that are to be taken seriously by their own employees