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Preventing ads from topping Google

Janet Babin May 15, 2009

Preventing ads from topping Google

Janet Babin May 15, 2009


Kai Ryssdal: Google had a bit of a problem for a couple of hours yesterday. There were scattered reports of users not being able to search or use e-mail. Considering that Google gets month billion search requests a month, scattered really adds up. That goes for companies as well as you and me. For businesses Google searches can be money in the bank. But ever since Google started selling ads in the space above its list of search replies, there’s been a game of can you top this going on. The answer is yes you can — for the right price. Companies have been able to top their competitors by paying to have their ad come up when the name of the competition searched. Janet Babin reports from the Marketplace Innovations Desk at North Carolina Public Radio.

JANET BABIN: Let’s say you want to buy software from Fire Pond. So you type the name into Google. And the first thing that comes up is an ad for Fire Pond’s competitor, Big Machines.

Scott Kline: You may end up doing an order with Big Machines thinking you’re doing business with our company.

That’s attorney Scott Kline of Andrews Kurth. He represents Fire Pond. This week it filed a class-action suit against Google. Kline says the way Google sells advertising linked to another company’s trademarked name is wrong.

Kline: We’re harmed both by the confusion to the consumer, that potential customer we never got, and our competitor using our trademark illegally to gain business.

Fire Pond isn’t the first company to raise the issue. But Professor Stacey Dogan at Northeastern University School of Law says Fire Pond could be in for a fight.

Stacey Dogan: Even thought trademark holders feel its unfair to them when big companies like Google get some financial benefit by using their mark, trademark law doesn’t condemn it. In fact, it encourages it as long as there is no confusion.

Google makes a hefty profit selling ads linked to trademarks. It auctions space above the search to the highest bidder. Louis Foreman is a branding expert at Enventys.

Louis Foreman: Based on the auction model that Google has created, there will continue to be increase in cost until you reach that kinda breaking point.

Fire Pond has apparently hit that point; it’s hoping its case goes all the way to a jury.

I’m Janet Babin for Marketplace.

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