Forum List » Guru News and Commentaries
Guru News, Stock picks and commentaries
New Topic
Goto Thread: PreviousNext
Goto: Forum ListMessage ListNew TopicLog In
Big Brother Knows What You Do on Google and Facebook
Posted by: Muhammad Bazil (IP Logged)
Date: June 23, 2013 08:24AM

Google (GOOG) and Facebook (FB) have recently admitted that they have been giving user information to the National Security Council (NSA) upon demand. The NSA is just one of the many intelligence agencies that branch off the United States Department of Defense. Its purpose is to collect and analyze communications and then use that information to see if there are any threats posed to the United States. In current news the NSA has been using a program called Prism, which collects various types of information such as search history, emails, and even live chats. The reason the NSA is able to do this is because of the Patriot Act, which essentially states that the government can conduct surveillance in order to protect American interests. In a recent turn of events big corporations like Google and Facebook have stated the NSA has obtained information from their servers. For example, Facebook recently stated that the intelligence agency called for roughly 10,000 requests. Google, on the other hand, has refused to reveal how many requests it has received, saying that the number it is allowed to show is only a partial sum of the actual total. Also, just a few days ago Google approached the Foreign Intelligence Surveillance Act (FISA) court to request that it be able to make public all the NSA requests that it had received.

The reason companies like Facebook and Google are trying to expose this to the public eye is because of their many users. People are not comfortable with the idea that the government is watching what they do in their private homes. To them it feels like someone is constantly watching their activities. It does not help either company if people start to think Google and Facebook are allowing NSA to collect data freely. From the get-go both companies have fought off claims that they allowed the NSA unlimited access to user data. If people start thinking their information is being given to Big Brother then they start to lose trust in companies like Google and Facebook. And when trust is lost companies have to try extremely hard to regain that trust. Also, if trust is lost then companies will not prosper on the stock market. However, recent events dictate that Google and Facebook are telling the truth about what the NSA has asked from them. Google, Facebook, and many other corporations want to reveal what is really going on; however, the NSA has prevented them from doing so by placing a gag order. Also, NSA publically admitted that it was indeed sending out requests to obtain user information. This was somewhat of a relief to Google and Facebook because it showed that the data requests from the NSA were actually true and that they were not making things up.

One would think that with all this controversy regarding the NSA, Google and Facebook stock would be plummeting; however, this is not the case. On June 7, when all this talk about user privacy just surfaced, Google surprisingly had an increase in shares of about 1.7%. Facebook also did well on that day where it increased around 1.6%. This was probably due to the various deals that Google and Facebook participated in while the user privacy issue had just hit the public. As of June 20th Facebook and Google have still been unscathed by all the NSA issue. However, Facebook has fallen 1.68% because of its various announcements regarding future company growth. Also, Google has fallen 1.77% because of the usual stock market trading. The reason that Google and Facebook stock prices remain unaffected by all this controversy is because, as previously stated, Google recently wanted its gag order from the NSA removed by going to the FISA court. Therefore, it would make sense if Google’s stock price increased, but this was not the case. Google actually went down 15.94 points when it announced that it would fight the gag order.

It will be interesting to see what happens to the big tech companies like Google and Facebook in the future; this is because technology is becoming increasingly integrated into everyone’s lives. And with the use of more technology by the layman, there are various different types of security risks that start to arise. There will be an increase in agencies that continually monitor and violate the privacy of the people. The overall issue revolves around how tech companies try to keep their user data private, and out of the hands of the government, without getting reprimanded for doing so. Also, if a company is forced to reveal its user data how will it do so without losing the trust of its users? These will be two main questions that need to be answered and the tech companies will have to walk an extremely fine line between the users that support it and the government that wants to violate user privacy for the better of the country. Basically, Google is a good buy because it is an extremely large tech company that is constantly growing and expanding. With its release of Google Glass and its purchase of Waze, the tech company is steadily growing. Facebook, on the other hand, still seems to be a risky buy because there are increasing numbers of social networks emerging. Although it still may be the top social network currently, there is no guarantee that it will remain that way. A good example would be MySpace, which was extremely popular but it eventually died down and lost public support.

Stocks Discussed: GOOG, FB,
Rate this post:

Rating: 2.5/5 (2 votes)

Sorry, only registered users may post in this forum.

Please Login if you have an account or Create a Free Account if you don't
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat