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The world’s largest Internet search company and the world’s most powerful electronic surveillance organization are teaming up in the name of cybersecurity.

Under an agreement that is still being finalized, the National Security Agency would help Google analyze a major corporate espionage attack that the firm said originated in China and targeted its computer networks, according to cybersecurity experts familiar with the matter. The objective is to better defend Google — and its users — from future attack.

Google and the NSA declined to comment on the partnership. But sources with knowledge of the arrangement, speaking on the condition of anonymity, said the alliance is being designed to allow the two organizations to share critical information without violating Google’s policies or laws that protect the privacy of Americans’ online communications. The sources said the deal does not mean the NSA will be viewing users’ searches or e-mail accounts or that Google will be sharing proprietary data.

The partnership strikes at the core of one of the most sensitive issues for the government and private industry in the evolving world of cybersecurity: how to balance privacy and national security interests. On Tuesday, Director of National Intelligence Dennis C. Blair called the Google attacks, which the company acknowledged in January, a “wake-up call.” Cyberspace cannot be protected, he said, without a “collaborative effort that incorporates both the U.S. private sector and our international partners.”

But achieving collaboration is not easy, in part because private companies do not trust the government to keep their secrets and in part because of concerns that collaboration can lead to continuous government monitoring of private communications. Privacy advocates, concerned about a repeat of the NSA’s warrantless interception of Americans’ phone calls and e-mails after the Sept. 11, 2001, terrorist attacks, say information-sharing must be limited and closely overseen.

“The critical question is: At what level will the American public be comfortable with Google sharing information with NSA?” said Ellen McCarthy, president of the Intelligence and National Security Alliance, an organization of current and former intelligence and national security officials that seeks ways to foster greater sharing of information between government and industry.

On Jan. 12, Google took the rare step of announcing publicly that its systems had been hacked in a series of intrusions beginning in December.

The intrusions, industry experts said, targeted Google source code — the programming language underlying Google applications — and extended to more than 30 other large tech, defense, energy, financial and media companies. The Gmail accounts of human rights activists in Europe, China and the United States were also compromised. So significant was the attack that Google threatened to shutter its business operation in China if the government did not agree to let the firm operate an uncensored search engine there. That issue is still unresolved.

Google approached the NSA shortly after the attacks, sources said, but the deal is taking weeks to hammer out, reflecting the sensitivity of the partnership. Any agreement would mark the first time that Google has entered a formal information-sharing relationship with the NSA, sources said. In 2008, the firm stated that it had not cooperated with the NSA in its Terrorist Surveillance Program. Hard money training.

Google has announced a deal to buy On2 Technologies, which provides technology that should help improve video quality on the internet search engine.

The deal for $106.5m (£62.7) should be concluded later this year, subject to On2 shareholder approval.

On2’s technology helps shrink video files, allowing high definition images to be delivered over the internet.

“We believe high quality video should be part of the web platform,” said Sundar Pichai at Google.

“We are committed to innovation in video quality on the web, and we believe that On2’s team and technology will help us further that goal,” he added.

Current On2 customers include Adobe, Skype, Nokia and Sony.

Google is the undisputed leader in internet search engines.

Last week, technology giant Microsoft and website Yahoo announced a tie-up designed to break Google’s stranglehold. Hard Money Association

Google Chief Executive Eric Schmidt resigned from Apple’s board of directors Monday, citing conflicts of interest.

Apple (AAPL, Fortune 500) said in a statement that the company and Schmidt reached a mutual decision to split ties as Google (GOOG, Fortune 500) enters new markets that directly compete with Apple’s iPhone and Mac operating systems.

“I have very much enjoyed my time on the Apple Board; it’s a fantastic company,” said Schmidt in a statement. “But as Apple explained today we’ve agreed it makes sense for me to step down now.”

Schmidt has been with Google since 2001 and on Apple’s board since August 2006.

Shares of Google rose 1.9%, while Apple’s stock gained 1.6%. National Hard Money Association

Many people found Google’s search site was extremely slow or inaccessible Thursday, and other reports pointed to troubles with other properties including YouTube, Gmail, Google Analytics, Google Maps, Google Docs, AdSense, and Blogger.

Judging by a Twitter search for #googlefail, the problem was international in scope, though it wasn’t immediately clear how universal the problems were. Google didn’t immediately comment for this story, though it did confirm an earlier Google News outage that lasted about three and a half hours.

Google is central to the online lives–and livelihood–of many, and an outage shows exactly how central it’s become–and not just through its primary business, search.

“The Internet dies without Google. Can’t get to my bank Web site because it’s waiting on ‘google-analytics.com.’ This is made of lame,” said Twitter user Tadiera.