Thursday, December 16, 2004

Google, Maybe Not Being Evil, But Certainly Greedy

From USA Judge rules for Google on key word ad spots.

SAN FRANCISCO — Internet search giant Google won a victory Wednesday when a federal judge ruled that its key word advertising practices were legal.
The ruling in an ongoing trademark-infringement case has huge implications for how advertisers and competitors can sell their wares in Web-based search marketing.

Insurance company Geico —upset that competitors' ads popped up when Google users searched for the Berkshire Hathaway unit — sued Google.

District Court Judge Leonie Brinkema in Alexandria, Va., granted Google's motion to dismiss the complaint, saying there wasn't enough evidence of a trademark violation.

Maybe im missing something here, doesn't Google generate revenues from the use of the word Geico insurance? I just think that both parties should share in these revenues. It seems like the right thing to do. There IS/WILL be plenty of money from this going forward.

Google's wildly popular AdWords program sells "key words" to advertisers that trigger sponsored advertising links. They're priced on a sliding scale, depending on demand.

Advertisers only pay if users decide to click the ads.

Advertisers pay $1.53 per click, for instance, for the words "Geico Insurance." American Blinds and Wallpaper, a company also suing Google, sells for $2.37.

Google generated $806 million in revenue in its third quarter, up from $393 million at the same time last year, most of it from search advertising.

Chris Winfield, whose New York-based 10e20 Internet marketing firm buys key words for advertisers, says the Google win "takes a lot of worrying away for my clients. They were afraid of having the Geicos of the world come directly after them."

There's a new paradigm coming for advertisers, and they wont be bidding for keywords, they will be BUYING keywords. A keyword will really have a destination, not just a daily value.

He believes competitive key word advertising isn't any different from comparing a company to a rival in a TV ad.

Big difference, people dont turn on the TV looking for a Pepsi ad. Google isnt knocking the competition by using Geico's name, they are leveraging it.

Lawyer David Rammelt, who represents American Blinds, couldn't disagree more.

"My client spent 75 years and hundreds of millions of dollars trying to build up its brand name and reputation," he says. "After all that time, Google steps in and sells our trademark to our competitors, for their profit? That's not right."

I agree 100%. If thats the case, why does Geico command a higher daily value than Joes Insurance co.

Rammelt says the Geico decision will have no effect on his case. Several other companies are also suing Google for trademark violations, including handbag maker Vuitton.

Washington trademark attorney Sheldon Klein says the Google victory Wednesday "removes some uncertainty, but it's not a final victory. This is a trial court decision, and different courts may disagree."

Geico also sued Google competitor Overture, a unit of Yahoo, which sells key word advertising that appears on Yahoo and Microsoft's MSN. Overture settled with Geico this month for an undisclosed fee.

Google general counsel David Drummond called the court victory "a clear signal to other litigants that our key word policy is lawful."

Lawful ,and NOT BEING EVIL are two different things.

However, Brinkema said the case would continue to move forward on one remaining issue: whether ads that pop up and actually use "Geico" in their text violate trademark law.

Google contends its policies expressly forbid advertisers from using trademark names in the text of ads. The search engine says it does its best to prevent ads that violate the policy from sneaking in, and that the advertisers would be liable for any trademark violation, not Google.

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