Google shares hammered

[geekerati]

Google shares hammered after government challenge

After climbing for a year and a half, Google shares fell 8.5 percent on Friday to $399.46 a share. It was the largest one-day percentage drop for the company and the highest volume--more than 41 million trades--since Aug. 18, 2004, when the search giant went public.

Although the move came amid a broad market decline, Google's share drop may be related to news on Thursday that Google is challenging a U.S. Department of Justice request for Web search data. While Yahoo, AOL and MSN have complied with a subpoena to provide information on random Web searches and Web sites indexed, Google said "no."

In a research report titled: "Confusion from DOJ issues creates buying opportunity for Google," WR Hambrecht recommended that investors take advantage of the drop to buy shares.

"We believe the market will react negatively to this news, decreasing Google's share price," the note said. "Ultimately, we believe Google's leadership position, resisting compliance while their competitors have bowed to government pressure, will bode well with its user base. Thus, we believe the company will not experience declines in traffic or subsequent advertising revenue short-term and will continue on plan."

The government is trying to resurrect the 1998 Child Online Protection Act, which would make it a crime for commercial Web sites to post material that could be deemed harmful if minors came across it, such as pornography. The administration wants the information to help bolster its argument that Web filtering software is ineffective.

Google contends that the government's request for information--1 million random Web addresses indexed by the search engine and all the keywords used in searches for a specified one-week period--is overreaching and too broad. None of the information sought could be traced back to any individual users.

Privacy advocates applauded Google's action, saying that while the government's subpoena covers Web search data that is not personally identifiable, future requests could go further and invade Web surfers' privacy.

However, they also say that by keeping all that data in one place, Google and the other search engines are, in effect, tempting the government with a huge honey pot of information that overzealous officials will target.

The case is a precedent in that it is the first public confirmation that the privacy concerns are legitimate. It also underscores the dilemma of how peoples' privacy is increasingly at risk as they conduct more and more of their lives online.

Source

[Anonymous]

I have a very good feeling that Google is going to rebound from the recent downfall.

They have many things in the works.
One such thing is that Dell has started putting Google desktop on each of their new computers going out. And to make sure the people getting these computers see the program it is set to open on boot up.
How do I know this? because I have people calling every day asking how to speed their computers up and Google desktop is always checked for start up.

So I have faith the stock is going to go up very soon

[Albatross]

I don't think that the late drop is a bad thing. Hopefully it will split then climb back up. Goog has too many things going right now to fall permanently.

[geekerati]

This ABC News article states that Google shares may fall an additional 50%.

Barron's scenario for a fall in Google's stock is based on speculating about what may happen if mounting competition or fraud by users of its Google's ad-buying system led to a 20 percent shortfall in bullish analysts' 2006 revenue estimates.

^^Source