More on Privacy

A Morgan Stanley research report dated March 15 does a good job describing the financial impact on ChoicePoint and Reed Elsevier (Seisint) resulting from the recent theft of personal information from their databases.  "Although problems at Seisint potentially impact on perception of management's acquisition track record, the size of the risk management business overall (2% of revenue 3% of EBITDA in 2004 rising potentially to 4% of revenue and EBITDA by 2009) limits the potential damage to EPS growth."  For ChoicePoint, which announced it will "discontinue the sale of information products containing sensitive consumer data" to certain markets, the impact will be, according to Morgan Stanley, $15-$20 million in revenue and 7% of EBITDA.

Certainly manageable numbers, but I think the report underplays both the potential growth in these markets prior to these incidents and the rising costs due to increasing regulation of the data brokers.  For one example see Senator's Schumer's press release.