Monday, September 14, 2009

Obama Reforms Challenge Financial News

President Obama just announced from Federal Hall in lower Manhattan that a new agency will be created to regulate "Consumer Financial Protection". The government needs to get into the caveat emptor business and many will welcome this move. Many details need to be developed; here is a scenario that may affect the earnings of Google (GOOG), Yahoo (YHOO) and Microsoft (MSFT).

The financial ad business seems to be lightly regulated.On line investors are frequently bombarded with word ads promising huge returns which are clearly not plausible. Offers of 450% returns if not more are served by search engine algorithms to probable investors. Search engines do only cursory reviews of the offerings and are really not protecting the public.

If as and when the new agency rides into town and starts regulating how much revenue will disappear.