Privacy concerns aside, analysts seemed unruffled by a Justice De...
Privacy concerns aside, analysts seemed unruffled by a Justice Dept. suit against Google. They express doubt about any long-term effects on the firm. The suit seeks search-query records to defend a porn-access law; earlier, Google spurned a DoJ request…
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for the data (WID Jan 20 p4). ABI Research said the govt. “unfairly” subpoenaed Google for records, but ABI Broadband & Multimedia Dir. Vamsi Sistla told us he doesn’t think “it will impact Google’s share value or market cap.” An 8.5% Fri. selloff of Google shares was a “temporary blip” the result of lukewarm tech sector performance, Yahoo’s “not- so-attractive earnings” (WID Jan 18 p9) and a recent spike in Google insider selling, Sistla said. DoJ’s suit shouldn’t have “any meaningful impact on financial results” on Google, Stanford Group said Mon. Stanford raised its 4th-quarter 2005 and full-year 2006 estimates for Google, predicting that next week the firm will report increased OIBDA over 100% and EPS over 200% for all of 2005, and foreseeing a 50% rise in OIBDA and over 40% EPS growth in 2006. ComScore Media search data for Dec. 2005 showed Google “significantly” increasing monetization from Nov., ComScore said, explaining an upgrade of Google to buy. Stanford analysts couldn’t be reached to elaborate on doubts DoJ’s suit will affect Google financials. Scoring DoJ for trying to make Google “support their own agendas” in justifying the Children’s Online Protection Act (COPA), Sistla said the case has “nothing to do with the privacy of the users,” since DoJ told Google it could remove identifiable personal data from material sought. He said the govt. case is “definitely not the last” against search engines trying to force them to help in non-criminal matters, adding that complying search firms “will probably learn a lesson or two from Google’s stance.” Sistla predicted Congress will query search- engine firms on cooperating with govt. regarding their search records and index information. That is “probably going to open up an opportunity for a better solution down the line” than suits, he said. Google “probably did earn some brownie points in the eyes of their users” for not yielding to DoJ, but if Google had cooperated, “average users really don’t have anywhere to go. Everybody just sold out,” he said.