Google faces legal challenges ahead of IPO
14 June 2004
Google is facing a slew of lawsuits ahead of its eagerly-awaited initial public offering (IPO) of stock.
The search giant consistently ranks as most popular search engine globally and expects to generate billions of dollars during the IPO.
However, suits against Google come from all quarters, including web rival Yahoo, which has charged Google with patent and trademark infringements tied to sales of search-related advertising. Overture Services, now a unit of Yahoo, alleges infringement of a patent on a system for auctioning placement in search engine results.
Experts predict that, if the majority of the pending lawsuits are successful, they could hamper Google's ability to generate sky-high profits, Wired News reports.
"Their revenue model is becoming more and more based on advertising, and if there's a limit on how they can do the advertising, that would have an adverse impact on their business," said Frank Bernstein, a partner at the law firm Sughrue Mion.
Google faces further lawsuits from companies in the United States, France and Germany, alleging that the company illegally allowed advertisers to use trademarked terms in their ads.
Google generates the vast majority of its revenue through its AdWords paid kewords programme.
The company also faces legal challenges based on privacy concerns surrounding its forthcoming free webmail service, Gmail. The email service provides users with 1 gigabyte of free storage, but scans personal emails for keywords linked to targeted advertising.
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