Like moths to a judicial flame, Google (NASDAQ:GOOG) has been in some litigious crosshairs for some time. Whether it's the Association of American Publishers and Authors Guild going after Big G for digitizing books or the copyright-infringement can of worms that is being cracked open with Google's purchase of YouTube, it won't be long before "order in the court" replaces "do no evil" as the company's motto. I'm guessing that the best way to land a job with Google now has less to do with writing code than with passing the bar exam.
The latest company to take Google to task may seem like an unlikely litigant. Ohio-based Universal Tube & Rollform Equipment filed a lawsuit against Google earlier this week with the U.S. District Court in Toledo.
Holy Toledo
Who? What? Universal Tube's beef stems from the sudden popularity of its website. Universaltubeandrollformequipment.com doesn't exactly roll off the tongue, so the company has been doing business from UTube.com since the mid-1990s.
I wrote about the tube, pile, and coil-processing specialist two weeks ago, after Alexa.com listed the UTube site as a traffic magnet. I tagged Universal Tube as "the immediate winner" in the $1.65 billion YouTube deal. It may still be, once the lawsuit is either settled or ruled on, but it clearly has been a near-term headache for the industrial company, which has seen traffic to its site spike from 1,500 hits a month to more than 2 million.
Just about any new-economy company would relish the opportunity to take advantage of those eyeballs, but the bandwidth hit has forced Universal Tube to move its site four times. The publicity stemming from this week's lawsuit is only likely to make things worse.
The long and winding dot-com road
We all know how this suit will end. Before legal fisticuffs fly, Google will do the right thing and buy the UTube.com domain from Universal Tube, and this will all be a jolly ole case study to be dissected by business and law schools everywhere.
Keep in mind that Universal Tube is a small company with $12 million in annual sales. Its website is used to generate leads, though it's more than likely that most of Universal Tube's business is being conducted offline. It's a near-term inconvenience for Universal Tube, but the outcome will likely provide some form of financial windfall for the company.
For starters, if UTube really is attracting so many misguided netizens, it's in Google's best interest to own that domain. At the very least, Google and Universal Tube can come to some form of referral arrangement, where Google pays for each redirected arrival. That way, Universal Tube would still keep its domain name yet turn a bandwidth liability into a lucrative asset.
No matter how this turns out, it reminds me of how Google can be so brilliant in its product rollouts yet overlook the obvious. Google AdSense is a breakthrough service that has empowered third-party publishers, helping its AdWords product trounce Yahoo! (NASDAQ:YHOO) in paid search, yet it never got around to securing the AdSense.com domain. That URL remained the longstanding home of the AdSense Consulting marketing firm until three years after the Google AdSense launch, when Google ultimately acquired the domain..
It may not seem like that big of a deal, but how hard would it have been for Google to either acquire AdSense.com or rename its service before its launch? Until it was acquired, going to AdSense Consulting's landing page would treat you to this little zinger:
If you think you can get rich quick placing other people's ads on your site or blog, please contact Google who has taken and used our business name without permission or compensation.
Ouch. Thankfully, the company didn't make the same kind of mistake with its more popular Gmail service. Gmail.com will take you right there.
Master of its domains
Naturally, we can't fault Google for YouTube's oversights. And in defense of YouTube's founders, the popular video-sharing site already brokered a deal with Warner Music Group (NYSE:WMG) to help turn copyright infringement into a win-win-win revenue-sharing scenario. Other content-rich media companies should follow that model in turning YouTube's video-hungry uploaders, and their disregard for little things like copyrights, into a financial advantage.
YouTube is also already playing along with the big boys. Over the past few months, major networks like General Electric's (NYSE:GE) NBC and CBS (NYSE:CBS) have used YouTube to help launch new shows. Over at Google Video, networks are also selling digital copies of their shows.
Digital streams are gradually coming into their own as promising revenue channels. We saw it with digital music, as Apple Computer's (NASDAQ:AAPL) iTunes transformed the company from piracy-propping adversary to moneymaking partner. The same thing is now happening on the video hotbeds of YouTube and MySpace.
The industry should get that part right all on its own. Now, if only Google can get the domain part right -- making sure that it looks before it leaps, to see where it's landing -- we can all come together to praise Google, instead of wondering where the next lawsuit will come from.
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Longtime Fool contributor Rick Munarriz is a "clip culture" junkie. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.
