updated 11/2/2010 5:36:51 PM ET 2010-11-02T21:36:51

Google Inc., the top Web search provider, said Tuesday it will allocate about $8.5 million to Internet privacy and policy organizations as part of a class action settlement involving its Buzz social hub.

The lawsuit had been filed by users of Google's free e-mail service, Gmail. In February, Google added a new social hub called Buzz, which let Gmail users track their frequently e-mailed contacts' status updates and other information shared online. But frequent e-mails don't necessarily mean people are actually "friends." The class action suit said Google violated privacy rights by automatically adding Buzz to Gmail without making it clear what information would be shared and with whom.

The settlement acknowledges that Google has made many changes to Buzz to ease privacy concerns. Google is creating an $8.5 million fund, mainly to go to Internet privacy and policy organizations. The company said it will also make additional efforts to teach users about privacy on Buzz.

A federal judge has given the settlement preliminary approval. The U.S. district court in San Jose, Calif., will consider final approval of the proposed settlement on Jan. 31, 2011.

Google shares closed up 60 cents at $615.60.

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