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Rumors abound that Google is setting up a new service that might blow away Craigslist, eBay, and – of course – newspapers in terms of classified advertising. It’s allegedly called Google Base.

(UPDATE: Dave Taylor managed to get some screen shots of Google Base. Also, after I posted on Poynter’s E-Media Tidbits about Google Base, Steve Outing also shared his perspective.)

In a nutshell, users of this (free, of course) service could upload any kind of content directly to Google’s servers, where it would become public, indexed, and searchable. If your content resides on Google’s servers, then Google can create a far more powerful and accurate index than is possible when relying on data gathered by crawling the web. They also could syndicate your content in any number of ways.

So if you wanted to, say, sell a used bicycle, you could upload text and images of the bike to Google Base. The service then would index those files in many ways, including geographically. Then they could deliver that content in search results and syndicate it out to, say, web sites and forums about biking in your city.

Yeah, I can see why eBay, Craigslist, and of course newspapers might shudder at that…

Apparently a few people have spotted the elusive new Google Base service when it has been temporarily up. (You can try your luck at base.google.com.)

Over at Ars Technica, Ken Fisher has written a good overview of what Google Base is supposed to be. He claims to have seen the home page, and grabbed this content from it:

“Google Base is Google’s database into which you can add all types of content. We’ll host your content and make it searchable online for free. Examples of items you can find in Google Base:

• Description of your party planning service
• Articles on current events from your website
• Listing of your used car for sale
• Database of protein structures

“You can describe any item you post with attributes, which will help people find it when they search Google Base. In fact, based on the relevance of your items, they may also be included in the main Google search index and other Google products like Froogle and Google Local.”

This is definitely one to watch. But at this point, it’s only a rumor. Keep that in mind. Still, I wouldn’t be at all surprised if Google does move in this direction at some point. It makes sense.

Yesterday, Google’s own blog issued a vague semi-denial that, I think, leaves room for this rumor to be accurate. Steve Rubel thought this was a good use of business blogging, but I’d argue exactly the opposite.

Here’s what the Google blog said:

“You may have seen stories today reporting on a new product that we’re testing, and speculating about our plans. Here’s what’s really going on. We are testing a new way for content owners to submit their content to Google, which we hope will complement existing methods such as our web crawl and Google Sitemaps. We think it’s an exciting product, and we’ll let you know when there’s more news.”

Hmmm…. Let’s think this through… “a new way for content owners to submit their content to Google, which we hope will complement existing methods.” Gee, that sound rather like, well, Google Base!

If Google is trying to quell rumors, that posting was an utter failure. If they’re trying to build buzz, a vague semi-denial tends to generate suspicion and distrust – which generally isn’t good for business, I’ve always found.

Here’s my advice to business bloggers: This medium thrives on authenticity and transparency. So: If you’re issuing a denial, make it a real denial. Be clear about it. Frankly, it just looks weird when organizations try to build deniability into a denial. If you’re unwilling to comment at this time, just say so. And if you absolutely must keep something secret, don’t put it on the web where people can find it, even temporarily.

I realize my reasoning may sound naive to corporate communications professionals. I’m not a PR person, after all. If I’m missing something here, I’d appreciate it if someone would enlighten me.