Hating the French may have become a cliched American pastime by now, but shareholders in Google (Nasdaq: GOOG ) have more reason than most of us to ask for the freedom fries.
Today we got word that Google is still considering taking a swing back at the French after a court ordered the firm to pay up $260,000 for infringing on trademarks owned by LVMHMoet Hennessy Louis Vuitton (OTC BB: LVMHF). (Note to French: That's no way to name a company.) By infringement, the court means allowing the placement of ads at the top of search pages generated from the luxury firm's famous moniker. Google was also ordered to stop placing the ads.
If this sounds familiar to you, you may remember a couple of other, similar lawsuits that Google is fighting in the land of Brie and Beaujolais. If it sounds kooky to you, well, then you must be an American. Our courts have found that placing ads this way isn't, in fact, a trademark infringement.
The French have a few more "issues" with free enterprise, not to mention free speech -- at least when it offends French businesses. I really wonder if the French would have a problem, say, if a search on McDonald's (NYSE: MCD ) or YUM! Brands' (NYSE: YUM ) Taco Bell turned up advertisements for non fast-food bistros or SupersizeMoi.
Should investors be worried? Well, the $260,000 is a trifle compared to last year's $660 million in free cash flow. But optimistic Google buyers shouldn't stick their heads in the sand, either. As of last September's quarterly report, a full 33% of revenues came from international markets, and management expects this percentage to grow. How many potential lawsuits in strange, foreign cultures? Suppose a more autocratic government decides to put entire revenue-generating words off limits? How might such cases put a dent in the oft-cited "limitless" revenue potential of Google?
It's something to ponder, at the very least, especially when you're holding a firm that trades for 140 times earnings. And it's something that's likely to ripple across the whole search-intensive industry of e-commerce. Yahoo! (Nasdaq: YHOO ) , Microsoft (Nasdaq: MSFT ) , eBay (Nasdaq: EBAY ) ? Get ready for your date with the French inquisition.
For related Foolishness:
- Don't be mean, or those French courts will get ya.
- See Google take a ride.
- Will the video search open another can of worms?
Seth Jayson swears he saw Sergei Brin on an episode of To Tell the Truth, but it could have just been the air in Winnemucca, Nevada. It's a loooong story. At the time of publication, he had no positions in any firm mentioned. View his stock holdings and Fool profile here. Fool rules are here.