Google Faces Serious Risk To Stock Price From Android Security Woes

The day after two researchers revealed security gaps in Google’s Android phone, Google’s stock took a nosedive. Of course, so did the rest of the stock market including competitors Yahoo, Microsoft and other tech heavyweights.

Android Developement
While the drop in Google’s stock price last week may not be directly related to the security gap revelation, growing concerns about Android’s security can’t be helping Google’s long-term stock value.

Researchers John Oberheide and Zach Lanier posted a video on Sept. 20 showing how to exploit two unpatched security holes in the Android phone. One of the holes pointed out by the researchers allows a Trojan to download and install malware on the phone without requiring user interaction. The other flaw enables cyber criminals to suppress permission prompts and install malware to gain full control over the handset.

In addition, a Lookout mobile security report estimated that between a half million and a million Android users were infected by malware in the first half of 2011. Galen Gruman, executive editor of Infoworld, even went so far as to call the Android a “malware cesspool.”

What does all this mean for Google’s stock price?

Well, Android’s reputation for being a “malware cesspool” so far hasn’t hurt Google in its efforts to beat back smartphone competitors Apple’s iPhone, RIM’s Blackberry, and Nokia’s Symbian. Microsoft’s effort to redeem itself in the smartphone market, the Windows Phone 8, has yet to hit the market.

According to Gartner’s latest statistics, Android has surged past Symbian as the top smartphone operating system, gaining a 43.4% market share in the second quarter of 2011, compared to a 17.2% market share in the same period last year. Symbian holds on to a 22.1% market share, while Apple’s iPhone operating system (iOS) has an 18.2% market share and RIM has an 11.7% market share.

To maintain that momentum, Google will need to address the Android security flaws or risk losing consumer trust.

Source: Forbes

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