A ‘black eye’ for Goldman

It may have to pay as much as US$2bil; CEO and CFO could face the axe

BANGALORE: Goldman Sachs Inc may have to cough up a big fine to settle the civil lawsuit brought by US regulators but the biggest damage would be to the reputation of the influential bank, analysts said.

Rochdale Research’s Richard Bove said Goldman may have to pay as much as US$2bil, including fees earned and penalties, and chief executive officer Lloyd Blankfein and chief financial officer David Viniar could face the axe for the “devastating decline” in the firm’s persona.

Since it is a civil complaint, it may not be “life threatening” for the company and the worst could be a large monetary fine, Citigroup analyst Keith Horowitz said. “Based on our understanding, this implies the government did not find sufficient evidence to justify a criminal action, although that cannot be ruled out in the future.”

Bernstein Research estimated a worst-case liability of US$706.5mil for the company, or US$1.20 per share, based on a 2010 average diluted share count.

Oppenheimer Equity Research said the shares were likely to suffer in the near term although Goldman will continue to post strong earnings.

“At the moment, it looks as if the SEC is pursuing an agenda aimed specifically at Goldman. That likely will keep a cloud over the stock for now,” Oppenheimer analyst Chris Kotowski said.

People walk past revolving doors of the new Goldman Sachs Group Inc global HQ, also known by its address as 200 West Street, in New York’s lower Manhattan. — Reuters

 

The lawsuit and other potential litigation may create an overhang on the shares, while upcoming regulations would cloud the earnings outlook, S&P Equity analyst Matthew Albrecht said.

The lawsuit may help the administration in swaying some on-the-fence Republicans to support a tougher financials bill that the White House had been lobbying for, Barclays said.

“These charges, and the timing of them, increase the likelihood of passage of a more onerous derivatives bill for dealers, and that could ultimately be far more costly to Goldman and its competitors,” Barclays analyst Roger Freeman said.

Goldman is seen reporting another quarter of out-sized profits, when it posts financial results tomorrow, after an unusually strong year from its fixed-income trading operation in 2009.

“While tough to quantify the impact from this complaint, we don’t see massive changes to the business model or earnings power over the long term,” UBS analyst Glenn Schorr said. — Reuters

Oppenheimer’s Kotowski said the stock would not perform well until the SEC charges were closer to resolution, but said he believed that the bank would remain highly profitable.
Goldman shares closed down about 13% at US$160.70 on Friday on the New York Stock Exchange. — Reuters

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Google: botnet takedowns fail to stem spam tide

'If one goes offline, spammers buy, rent, or deploy another' 

Spam levels have remained resolutely stable despite recent botnet takedowns, according to a survey from Google's email filtering business.
Google Postini reports no lasting effect from the recent takedown of spam-spewing botnet, such as Mariposa and Mega-D. The command-and-control servers associated with the Mega-D botnet were isolated towards the end of 2009, effectively decapitating one of the top-10 junk mail sources.

Early this year, government agencies and security firms teamed up to take-down several other botnet targets - including Waledac, Mariposa, and Zeus - using similar tactics. The operations are these botnets were either curtailed (Mariposa) or severely hampered in the process (Zeus).

These combined efforts have failed to make much difference in the volumes of spam circulating online. Spam and virus levels did dip down 12 per cent from a Q409 high but held "relatively steady" throughout the first quarter of 2010, Google Postini reports.

"This suggests that there’s no shortage of botnets out there for spammers to use," a blog post by Postini researchers notes. "If one botnet goes offline, spammers simply buy, rent, or deploy another, making it difficult for the anti-spam community to make significant inroads in the fight against spam with individual botnet takedowns."

The Google spam filtering division concludes that going after botnets is no more effective than the previous tactic of targeting rogue ISPs. The takedown of rogue ISP 3FN bought a temporary respite from the spam deluge for about a month. However, after Real Host, another ISP, was taken out months later spam volumes recovered after only two days. The marked difference was due to use of improved disaster recovery approaches by cybercriminals.

Google's conclusions are based on an analysis of spam volumes flowing into the email in-boxes of 18 million business users working for of 50,000 organisation protected by Postini's technology. Analysis of the junk mail traffic blocked by Google's technology also shows a 30 per cent increase in the size of individual spam messages toward the end of March - signs of a possible resurgence in the use of image spam - and the use of natural disasters (such as the Haiti earthquake) and celebrity gossip in a bid to persuade recipients to waste time on junk mail messages, some of which form the kick-off point of financial fraud.

The prevalence of malware within spam, which rose from 0.3 per cent at the start of 2009 to 3.7 per cent in the second half of last year, fell back to 1.1 per cent in the first quarter of 2010. ®

By John Leyden • Get more from this author

Source: http://newscri.be/link/1075392

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The Dogs of War: Apple vs. Google vs. Microsoft

It’s hard to grasp the breathtaking scale of the epic war between Microsoft, Google and Apple. Billions upon billions of dollars. Entire industries at stake. This is the board. These are the pieces.

If you think about it, what’s shocking isn’t the size of Microsoft or Apple, companies that are decades old, established titans of industry (even if they have stumbled in the past) — it’s Google. In just over 10 years, Google’s become arguably the most important company on the web, spreading to anything the internet touches with astonishing speed, almost like a virus: From the web and search to books, video, mobile phones, operating systems, and soon, your TV.


Friends have become enemies, enemies more paranoid. And you know, it’s only a matter of time before Google’s remaining gaps on this map are filled out. (BTW, you can click on the picture to make it bigger.)

Back in the 1990s, “hegemony” was another way to spell “Microsoft.” It was Microsoft that looked to invade everything. It was Microsoft in the Department of Justice’s sights for antitrust issues. Anywhere there was computing, there was Microsoft. But today, it’s Apple that conquered music. Apple that revolutionized mobile phones. Apple that might make tablet computing mainstream. Not Microsoft. As the incumbent, Microsoft’s not going anywhere. But it plays catch up more often than it leads, at least when it comes to the things people care about now, like the web and mobile.

What’s at stake? Nothing less than the future. Microsoft wants computing to continue to be tied to the desktop — three screens and a cloud, as Ballmer is fond of saying. For Apple, it’s all about closed information appliances with lots of third-party apps, computers anybody can use. And for Google, all roads lead to the internet, and the internet is synonymous with Google.

This isn’t a road map. It’s a study guide.

By Gizmodo