Today in Connected Consumer

If they haven’t started to already, investors may soon need to start pricing the potentially significant regulatory risk into the share price of companies built on user data. Yesterday, Google officials went up to Capitol Hill to try to answer Congress’ concerns about its revamped privacy policy. It apparently¬†did not go well, all but ensuring continued scrutiny and bad PR for Google.¬†Across the Atlantic, meanwhile, the EU is poised to put the kibosh on the new policy altogether, at least for now. Given that Google hopes to use its new integrated data policy to serve up more personally relevant ads at higher prices, the regulatory pushback has obvious implications for Google’s long-term earnings potential. Ditto Facebook. In its IPO prospectus, the company mentions privacy 35 times, mostly as a risk factor that could hurt future earnings. The tricky part will be figuring out how much of a discount to assign to the risk.