Subpoena Resistance Hurts Google Stock

imrec writes "Google stock sees a record 8% decline shortly after news concerning the government's request for Google's search logs broke earlier this week." From the article: "'There are potentially concerns that Google could be in the cross-hairs of the Justice Department,' Kessler said. 'Investors are worried about interest rates and inflation and they felt technology stocks like Google, Apple, Yahoo and others were able to withstand these kinds of pressure. But now that ability is in doubt,'"

Comments

Two Words . . .

[Newt-dog]

Buy Now!

Re:Two Words . . .

[Ireneo Funes]

Google's PE is not nearly as high as the average PE for a tech stock during the dotcom bubble was... the fact that GOOG has a reliable business model with sales growing more than 100% per year is what's driving the stock price this high, not pure speculation as was the case by the end of the 90's

Google should stick to "not being evil"

[Ckwop]

Ahhh, now we'll really see whether they can really live up their "Don't be evil" policy! Does Google prefer stock price over ethics? While my instinct tells me the answer is firmly "no" I think we are all interested in the result.

I think Google did the right thing. In the western democracies we all have strict rules governing the powers of the various investigative authorities. There are very good reasons for this. The Police and Justice Department have incredible powers granted to them by the state. However, the same power that allows them to catch criminals can also be used for less noble purposes.

In any organisation of considerable size there is always a rogue element. An element that is deceitful, unethical and motivated by influences orthogonal to the goals of the institution. Sometimes these are fairly benign: David Blunket trying to get a quick visa so he and his bit on the side have a nanny to look after their child. Sometimes these can be very malicious: Robbers breaking in to the Democrat headquarters and planting bugs so Nixon could spy on their election campaign. (I'm British so they may be inaccuracies in this account)

The law is there not only to protect us from criminals but to protect us from the people who catch them too. In many ways, the protection from the people who catch criminals is vastly more important than protection from criminals. What criminal can get state sanctioned approval to search your home? Impound your possessions? Wrongfully impression you?

All over the western world, governments are granting their Police more and more powers in the name of combating terrorism. The chance of being killed by a terrorist is approximately zero. For comparison, in Britain 0.03% of us will die[1] in ALL possible mishaps this year. That takes account of murder, car crashes, being eaten by ferocious llamas and so on and so forth.

I would therefore venture that the threat posed by increasing Police power is vastly greater than the threat of terrorism. In Britain, we saw this illustrated for us nicely when an octogenarian, life-time member of the Labour party was escorted from the annual conference and arrested under anti-terrorism legislation. Here was a man saying that war in Iraq was unjust and he gets arrested under anti-terrorism legislation. This war on terror is becoming a war, conducted by ourselves, against ourselves to remove the democratic values we cherish so dearly. Shakespeare himself could not write such a dark tragedy.

Getting back to point. Just because the Justice Department says Google should jump it does not mean Google should meekly reply: "How High, Officer?". Just because the government asks you to do something does not mean that they have the proper authority to ask for it. Let them prove in a court of law that they have the proper authority to make such a claim. If they're right, they'll win and Google will have to capitulate. If they're wrong, then a precedent is set and the complicated system of checks and balances has once again protected liberty.

Simon

[1] - The Independent, Yesterday, in the Editorial section. Feel free to correct this figure if it is incorrect.

Re:Google should stick to "not being evil"

[freedom_india]

On the point.

There is HUGE difference between the Government and the Law.

Law is NOT made by Justice Department.
Google is right in standing up the Republican Justice Dept and saying: "Here's my middle finger. You can lick it or you can screw yourselves with it."

Obviously, the request was made by justice dept. not for fighting terrorists, but just to "help" other campaign corporates like MSFT to learn Google secrets.

This government is for criminals, by criminals (DeLay, Jack Abr.., etc). and for the criminals.
Since when do we start listening to criminals and reveal our business secrets to them.

Just TWO more years Google. Hold On !!!

This is FUD

[SpaceLifeForm]

The entire market was down. Granted, not 8%, but to attribute
the decline in the Google shareprice because of the DOJ action
is silly.

Re:Google will ultimately have to bow to sharehold

[Rude Turnip]

Specifically, the founders hold all the voting stock of the Company. Everyone else has non-voting stock. Even if other investors hold a large number of shares of non-voting stock, which outnumber the voting shares, they can't do squat. This was a brilliant move on Google's part. Fund the Company like a public one, but run it like a private one (ie with long-term goals and responsibility).

Re:For christs sake

[segfault_0]

Sounds to me like you dont believe a company can be good under any circumstances if they make money. I think the real question is does capitalism really want "nice" companies. I guess our reactions when we see one, (i.e. supporting them when the government makes ridiculous requests of them), will answer that question wont it? Im waiting to see what we will do, not google.

intentionally misleading interpritation

[vettemph]

"Subpoena Resistance Hurts Google Stock"
should be:
"Subpoena Hurts Google Stock"

The Resistance is the only reason the stock didn't drop by 20%. Our federal PR machine would like you to believe that the resistance is the problem.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Republicans Creating Bad PR

[TeachingMachines]

All of the news coverage of Google's "slide" is designed to punish Google for their refusal to comply with the wishes of the Republicans... "Release your search data to us or else bad things will happen to you[r stock]." Hopefully Google will hold on for the ride.