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The google AutoLink feature doesn't do anything AUTOMATICALLY. It is only done when a user moves their mouse up to the toolbar and clicks the button. So go ahead and create toolbar with an option that is user initiated and its fine. Its baffling how many people just don't get it, the user has to activate the feature every single time they want to use it.
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Yes, but I think the issue that many have is if this is allowed, where is it going to end? Who's to stop Joe Shmoe from having a popup on their site that the user accidentally clicks YES to and it installs a toolbar that negates the Google toolbar and forwards all of the links to yet another competitor? Or better yet a browser that does it (which Google will do I believe). Who would scream bloody murder then? There would be no end in site to what people would do to the browsing experience, and when everyone NEEDS (not wants, but NEEDS as in a necessity) a browser to surf online, it becomes sketchy insofar as monopolizing a market when you are a company this huge with this much reach.