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But I've just searched for "popularity based search engine" in Google, and used highlight on the results. When I turn highlight off and on again, every time it takes progressively slower to complete, as though it is collecting data. If I keep turning it off and on it crashes my browser.
What data is it collecting?
If you don't want data passed, turn off the advanced functions.
Regarding getting banned, I think you are jumping to some serious (an inaccurate) conclusions. Just because you use the toolbar and your site ends up getting banned, doesn't mean the toolbar caused it.
Check the highlight. For every time you press it it must add the current request to the previous. For dynamic pages what does it register when it is on? For javascript inserted text, what does it register? When I click it on and off for the same word on the same page, it adds it all up and sends it to Google. I suppose this will register as duplicate text.
I had background images in my slider menu, that had about 10 transparent pixels. When I had the highlight on and mouseovered my sliders the browser crashed. I took the images out and it stopped.
Now if its collecting data for my site to be indexed, but clashes with my site, the data it sends back will be incorrect.
I was banned the next time Google came round, after improving my site, and the only clear change has the installation of the Toolbar and viewing my site with it in.
So you can't really say that it didn't. I can definately say that Google's Highlight crashed my browser while at my site, and if its collecting data, that would, I imagine, would be bad data, bad enough to get me banned.
Google now are the dictator of the internet, and there's no alternative offering democracy.
DO AS WE SAY OR YOUR SITE iS DEAD.........
Who's on the case to compete with Google?