Copyright is probably the single biggest issue for search engines, and U.S. District Court Judge Howard Matz just sent a big blow to the search business model, stating that Google's image thumbnails of stolen content violate copyright:
A federal court judge has concluded that an image search service run by Google Inc. infringes on the copyrights of adult entertainment company Perfect 10 Inc. by displaying small versions of its images in search results.
Matz ordered both sides to craft a narrow preliminary injunction that would respect Perfect 10’s copyrights but not curtail Google’s broader right to catalog and display online images.
If Google showing those images is illegal what would you think a judge would think about AdSense ads on much of the pirated content on the web?
I recently bought a few Google shares and all I can think is that there will likely be a lower entry point for those debating doing the same.