Is excessive whitespace in the HTML source bad?

Matt's answer:
CUTTS: A question Funkman, in an undisclosed location, “Excessive white space in the HTML sources is bad. Fact, myth, or somewhere in between?” We really don’t care that much. We’re pretty good, you know, anytime we see white space, we’ll separate stuff and we can ignore white space. So, it doesn’t really cause us a lot of harm either way. The only thing that–to really pay attention to, is I have seen some sneaky people who will try to do hidden text or whatever and they’ll start off their HTML with like, 60 new lines, right? So, whenever you view source, you’re like, “Oh, man, it’s blank, there is no source.” “Whoa, dude, you just blew my mind!” And you know, anybody who’s savvy is like, or I could use the Scroll Bar and see what’s down here. So, you know, I would just use whatever white space is reasonable for you. I think clean HTML with some nice indentations and you know, all that sort of stuff looks good. It makes your site more maintainable. It makes it easy to upgrade and see what’s going on with your source. And Google does a very good job about, you know, finding separators and breaking it. So, don’t you know, make one word for every 200 blank lines, but otherwise, you know, as long as you’re doing normal reasonable stuff, I wouldn’t worry about it that much. I’d do whatever is best for you as you are maintaining your site.
by Matt Cutts - Google's Head of Search Quality Team