September 30th, 2006
Buying a competitor's brand
I am not sure I agree with the judge that just ruled that it is not a copyright infringement to purchase Google adwords that key off a competitor's name or product. The free market argument would be "go for it" pay $.20 every time someone searches on Coke and clicks on your ad for Pepsi. The case the judge ruled on did not apparently deal in the even more wild west practice of using your competitor's brand in your ad; something that is not uncommon in the world of promoting spyware.
For instance search on "spysweeper" and you will see seven Google ads, four of which click through to affiliates of Webroot Software the producer of Spysweeper the product. One goes directly to Webroot's site and one goes to a competitor's site. Click on any of those ads and someone pays Google as much as $2.00. Search on "Spyware Doctor" and you get over ten ads, one from Webroot. But all of those at least advertise the original company's product. So far within the judge's interpretation of what is allowable.
But search on "pctools" and you see a link to pcDocpro.com, a pretty obvious attempt to borrow the brand of PCTools' Spyware Doctor. And take the brand of all brands, Kleenex, and search on it. The first ad on the right is for Uline Kleenex which takes you to a catalog that sells White Swan facial tissues; an obvious misuse of Kleenex' brand.
Google is in the market making business. In a sense they are similar to an eBay or Wall Street in that they lead to more efficient markets. Certainly the entrepreneurs who are bidding up various terms feel they are getting their money's worth. And clearly the consumer is finding what he or she needs via Google ads. But has there ever been a middle man that takes such a HUGE chunk our of commerce?
I am not calling for more government oversight or stronger rulings from judges. But I will go so far as to predict that the outrageous fortune being earned by Google today is destined to face market forces as well. That much money flowing towards one recipient is bound to create eddies and side currents that will eventually knock Google from its dominant position.
Richard Stiennon is an industry consultant. See his full profile and disclosure of his industry affiliations.
