Google Turns to the Dark Side

How about a new motto, Google (Nasdaq: GOOG  ) ? "Don't be quite so evil ... most of the time."

Despite virulent criticism, Google plans to allow firms to bid for the trade names of their competitors as advertising keywords, BusinessWeek reports. For example: Dell (Nasdaq: DELL  ) could bid to have its ads appear when users search for "HP" or "Hewlett-Packard."

That's not evil? In what universe?

In effect, Google is throwing a big, juicy bone to digital squatters, the sort of e-scum who make a profit from snagging website addresses of major companies or celebrities in the hope of selling them for a huge profit.

Now, thanks to Google, not even search is safe. Legitimate, upstanding firms will be forced into bidding wars to protect their brands when trademark keywords go up for sale around the world on June 4.

"Following a global legal review, we have made the changes in countries whose legal and business practices are consistent with making the change," Google spokesman Ben Novick told BusinessWeek in an email.

Oh, goody. Ever work in banking in, Ben? Keep it up, and you'll have Google lined up alongside Bank of America (NYSE: BAC  ) and Citigroup (NYSE: C  ) in America's ever-growing Business Hall of Shame.

As a Google shareholder, I expect the company to make good on its promises. "Don't be evil" is one of them -- a not-terribly nuanced jibe at Big Goo's principal rival, Microsoft (Nasdaq: MSFT  ) . You can do that when you're the market leader. You can make fun of Yahoo! (Nasdaq: YHOO  ) and IAC's (Nasdaq: IACI  ) Ask.com ... all the while dangling cash from this surely legal but entirely despicable trademark keyword business.

Don't be evil? Look in the mirror, Google. Your horns are showing.

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Google is a Rule Breakers recommendation. Dell and Microsoft are Inside Value picks. Try any of our Foolish services free for 30 days.

Fool contributor Tim Beyers had stock and positions in Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy longs for the days of the lunch whistle.


Read/Post Comments (18) | Recommend This Article (34)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 12, 2009, at 2:30 PM, accelerando wrote:

    You are very, very wrong.

    I am the developer of a video game that is kind of like the sims. When the original version of our game was new and hot-selling we paid around ten cents per click to be able to use various sims related keywords such as sims, the sims, the sims2 etc.

    These brought tremendous traffic to our site, and basically allowed a small guy to compete in a big pond. If our game was really as good as the sims (it was more clever, but far, far 'smaller') we would have been able to sell millions in the raw capitalistic meritocracy that is the internet marketplace.

    If we were banished from using those keywords I would right now be working for a large game company churning out same-old, same-old garbage.

    As it was we carved out a nice little niche, with our game beloved by a fairly large and loyal group of teenage girls all the world over, and are presently happily building a new, somewhat larger and better game from the profits.

    Who has lost from this? Not EA -- to the extent that we influenced the overall marketplace, we broadened the demand for 'human simulation' games -- to everyone's benefit.

    So perhaps you should reexamine your assumptions. Why shouldn't HP have an ad next to the listings when someone types in DELL -- as long as the ad doesn't claim to sell DELL computers and is clear that the admaker is a competitor of DELL, seems perfectly legit. And believe me. Google is a fanatical policeman of these niceties

  • Report this Comment On May 12, 2009, at 3:16 PM, Trapper5 wrote:

    This article makes no sense. If I do a search for Hertz rent a car, and on the side, clearly marked as advertising, are ads for competitors - that's not evil, that doesn't degrade Hertz's brand in any way. It's a useful service to the web user.

    Trademark law is not an Intellectual Property hammer for companies. It's purpose is consumer protection by preventing Company A from pretending to be associated with Company B.

    Just because you don't like it, does not make it wrong, does not make it illegal and most certainly does not make it evil. It's just competition.

  • Report this Comment On May 12, 2009, at 3:38 PM, joseph78 wrote:

    I agree this article makes no sense. Why should Google sell advertising spots for $0.10 per click ( No one else is allowed to bid so it will be sold at minimum cost) if there is someone willing to pay $10 per click ?

    And what if a local tech store wants to advertise service that fixes Microsoft products or Dell laptops and so on...

    Or why should Google shareholders suffer from this ? Evil ? There is nothing evil about trying to make money and sell your service to a customer that pays more. The idea offered is like a Rent control for large corporations. Let them pay the fair market price for advertising....

  • Report this Comment On May 12, 2009, at 4:13 PM, masterN17 wrote:

    I fail to see how this could be considered evil. The mischievous part of me even likes it. I agree digital squatting is a nuisance, but calling it evil is a bit of a stretch. The closest analogy I can come up with is patent trolling, and I'm not sure it sticks.

  • Report this Comment On May 12, 2009, at 4:15 PM, masterN17 wrote:

    As an addendum, this practice even seems beneficial. It's pro-competition. I'm guessing most of the "virulent criticism" comes from the big shots. The first post in this thread is an instructive example.

  • Report this Comment On May 12, 2009, at 5:22 PM, stan812 wrote:

    This is evil because it's a bidding war - the company with the biggest bucks gets the rights. If they gave it away that would be different.

  • Report this Comment On May 12, 2009, at 5:34 PM, HolyShmoley wrote:

    Yeah, although I understand where the guy's coming from... I think he's entirely wrong.

  • Report this Comment On May 12, 2009, at 6:35 PM, MichalTod wrote:

    It would only be evil if Google changed the search results from a search on a trademark to show a competitor. Showing a paid sponsorship link to the side of the search results? Only a small fraction of people click on those (1% if you're very, very lucky) and these links are clearly marked as ads.

    Not evil. Just business.

  • Report this Comment On May 12, 2009, at 9:04 PM, nin4086 wrote:

    "In effect, Google is throwing a big, juicy bone to digital squatters, the sort of e-scum who make a profit from snagging website addresses of major companies or celebrities in the hope of selling them for a huge profit."

    Why is this not the same as squatting?

    Because the search results will not be affected. Only the advertising will be.

    "Now, thanks to Google, not even search is safe. Legitimate, upstanding firms will be forced into bidding wars to protect their brands when trademark keywords go up for sale around the world on June 4."

    Legitimate, upstanding firms don't need to buy their own brand names. That would be a really stupid thing to do. The firm owning the brand will generally show up high in the search rankings. Most users click there anyway.

    Other readers have explained the benefits of being able to buy a competitor's, partner's brand as ad word.

  • Report this Comment On May 12, 2009, at 10:16 PM, DonEnriqueDuChin wrote:

    A cobbler should stick to his last.

    This is not evil. Google is free to do this. Nothing wrong with ads.

    I would argue that they should be free to even sell search results. Why not? If it's a wrong choice, a new Google will rise quickly, or Yahoo might be back.

    Companies should be as free as possible to create their products. Don't tell companies what to do, stop using their service if it doesn't suit you.

  • Report this Comment On May 13, 2009, at 12:15 AM, Famous2009 wrote:

    What all of you commenters have in common is that you don't understand trade mark infringement. This is classic bait & switch. Using your logic, maybe my band should record an album and just put "Coldplay" on the album cover because we want to sell more records. A little competition won't hurt Chris Martin, right? Sure, there's nothing wrong with a little competition, but these competitors should compete under generic terms not trade mark terms. My vote is evil.

  • Report this Comment On May 13, 2009, at 11:22 AM, compwx wrote:

    @Famous 2009, What Google is doing isn't equivalent to allowing you to put "Coldplay" on your album cover, this is equivalent to Walmart allowing you to pay them to put your album next to Coldplay in their stores.

  • Report this Comment On May 13, 2009, at 12:26 PM, nogrthinker wrote:

    As a consumer, I would like to see what the competitor has to offer. First though, I want to see the Ad for which I was searching. Then I'm happy to look at the competition. The other adds could even be conveniently grouped under a heading: COMPETITION

  • Report this Comment On May 13, 2009, at 1:06 PM, masterN17 wrote:

    @stan812: How is a bidding war in a capitalist system 'evil'?

    @Famous2009: Per compwx's response, I believe your analogy is invalid.

  • Report this Comment On May 15, 2009, at 2:13 AM, Famous2009 wrote:

    @ nogrthinker: I like that idea. That would be pretty clear.

    @ compwx: perhaps a better analogy would be leaving my album cover blank or generic and then placing it behind the "Coldplay" tab (think old record store placement). It's completely reasonable for someone thumbing through the Coldplay section to come across my album and mistakenly believe it's a new Coldplay album. Therein lies the problem.

    Search ads that are showing up because of a search for a specific trademark are not "next to" any other set of search ads. There is one set of ads.

    Trademark owners would not like this. They also won't like this:

    http://www.reuters.com/article/marketsNews/idINN145252142009...

    I think they just got a little Evil-er.

  • Report this Comment On May 15, 2009, at 2:01 PM, McCrikey wrote:

    Biggest newspaper copyright violator in the history of civilization.

    When? When? When will newspapers wise up and A. Sue the bejesus out of them or B. Negotiate a humongous cash settlement in its place.

  • Report this Comment On May 15, 2009, at 6:57 PM, THNKFRST wrote:

    I seem to recall that FOOLs love BAIDU? Google is trying to compete with the likes of Baidu but you give them grief for competing on a level playing field...

    THNKFRST

  • Report this Comment On May 19, 2009, at 1:59 PM, JustMee01 wrote:

    Google will eventually be displaced, as they become more and more predatory. Eventually, some user-friendly, fuzzy alternative will replace them due to grassroots peer pressure. They live in a space that requires that their users see them as the best source-- the space defines the word discretionary.

    As they increase this kind of behavior, they'll erode that user preference and they'll become obsolete. I just ripped Google Toolbar off IE, because of the performance of my aging desktop. When my performance went back to normal, it reinforced just how much information that little piece of spyware was probably collecting. I haven't been to their site since, and expect I never will be back again. They're redundant with many other free resources. Why bother?

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