Monday, February 07, 2005


One reader writes that he read an article today about a French law suit lost by Google. He says the title was French Fried Google. I saw snipets of the article. I read an article that says Google may appeal the decision.

The US courts have ruled that a search engine has the right to advertise competitors products next to search results. In France, there have been two successful suits that have ruled that a person who searches on a specific brand should only see advertisements for the specific brand. Google can easily make the switch and only serve up ads about specific brands.

This is a terrible ruling but the French may stick to the rule. If so, the French government will protect the big French Corporations to an extent but the French people will pay higher prices and have more trouble finding the best goods at the best price.

Germany, France and other parts of old Europe have stagnant economies because of "old-way-thinking". In the long-run, restricting trade hurts the total economy more than it helps the few beneficiaries. Google will serve just as many if not more advertisements in France as Yahoo or any other provider but the people will not see the variety of goods that they would other-wise see.

Investors who have negative opinions about Google stock value, have seized on the news and have driven the stock down. Investors who have positive views on the stock should use the decline as a buying opportunity. In a monitored account, we purchased a few more shares a half hour or so ago.

It will not take much news to reverse the process. A little good news could cause investors to jump on the stock heavily. The new services on the way, take a lot of money and a long time to develop. As each is rolled out, it will be interesting to see how quickly they add to the total revenue pie.

France will continue to be a relatively small market for Google. China adds the equivalent of the entire French economy every three years or so. Google has bigger fish to fry.