An important case for Google’s future (GOOG)

By: ispeculatornew
Date posted: 07.13.2009 (5:00 am) | Write a Comment  (0 Comments)

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google-logoHave you ever heard of Rosetta Stone(RST), one of the more recent IPO’s on the NYSE, a company that sells software that guides users through the difficult task of learning languages.  They are now suing Google in a case that could set an important precedent. It’s quite simple really. If you go to Google and search for “Rosetta Stone”, depending on your country, you will probably see ads by a few different companies. And that, according to Rosetta Stone is illegal because Google is making money off of Rosetta Stone’s trademark. Of course, this will be one those fights that Google will fight until the end because it is easy to imagine how many companies could go on and sue Google. There are so many trademarks that Google sells advertising on that it could also mean very important losses if ever Google had to stop.

rosettafrench1“We allow trademarks to be used as keyword triggers in Adwords because users searching on Google benefit from being able to choose from a variety of competing advertisers” said a spokesman of Google. Of course, that defence seems very poor to me as there is no way a company can defend its actions simply by saying it is doing what is best for its users. Can you imagine all those torrent sites and others such as The Pirate Bay trying to defend themselves legally by saying that they are doing it for their users? Seems highly unlikely. Of course, Google will have a lot of other of arguments but I do think that this case should be followed very closely by all Google analysts. Today, the stock barely moved and actually rose 4,01$ to 414.40$ as few analysts give Rosetta Stone much of aa chance to succeed in this case. The story everyone is talking about is really about Google’s upcomming play on operating systems.

So is it the law case that will define Google? Of course not. But I think it is one we should follow closely as it might have an important impact on the search operations of Google, which to date, remain the only very profitable area in the internet giant.

What do you think? Think thaat Google should feel threatened by this legal action?

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