Knowing Certain Trademark Ads Were Confusing, Google Sold Them Anyway — for $100+ Million

Disclosure: I serve as a consultant to various companies that compete with Google. But I write on my own — not at the suggestion or request of any client, without approval or payment from any client.

When a user enters a search term that matches a company’s trademark, Google often shows results for the company’s competitors. To take a specific example: Searches for language software seller "Rosetta Stone" often yield links to competing sites — sometimes, sites that sell counterfeit software. Rosetta Stone think that’s rotten, and, as I’ve previously written, I agree: It’s a pure power-play, effectively compelling advertisers to pay Google if they want to reach users already trying to reach their sites; otherwise, Google will link to competitors instead. Furthermore, Google is reaping where others have sown: After an advertiser builds a brand (often by advertising in other media), Google lets competitors skim off that traffic — reducing the advertiser’s incentive to invest in the first place. So Google’s approach to trademarks definitely harms advertisers and trademark-holders. But it’s also confusing to consumers. How do we know? Because Google’s own documents admit as much.

Today Public Citizen posted an unredacted version of Rosetta Stone’s appellate brief in its ongoing litigation with Google. Google had sought to keep confidential the documents that ground district court and appellate adjudication of the dispute, but now some of the documents are available — giving an inside look at Google’s policies and objectives for trademark-triggered ads. Some highlights:

  • Through early 2004, Google let trademark holders request that ads be disabled if they used a trademark in keyword or ad text. But in early 2004, Google determined that it could achieve a "significant potential revenue impact" from selling trademarks as keywords. (ref)
  • In connection with Google’s 2004 policy change letting advertisers buy trademarks as keywords, Google conducted experiments to assess user confusion from trademarks appearing in search advertisements. Google concluded that showing a trademark anywhere in the text of an advertisement resulted in a "high" degree of consumer confusion. Google’s study concluded: "Overall very high rate of trademark confusion (30-40% on average per user) … 94% of users were confused at least once during the study." (ref)
  • Notwithstanding Google’s 2004 study, Google in 2009 changed its trademark policy to permit the user of trademarks in advertisement text. Google estimated that this policy change would result in at least $100 million of additional annual revenue, and potentially more than a billion dollars of additional annual revenue. Google implemented this change without any further studies or experiments as to consumer confusion. (ref)
  • Google possesses more than 100,000 pages of complaints from trademark holders, including at least 9,862 complaints from at least 5,024 trademark owners from 2004 to 2009. (ref)

Kudos to Public Citizen for obtaining these documents. That said, I believe Google should never have sought to limit distribution of these documents in the first place. In other litigation, I’ve found that Google’s standard practice is to attempt to seal all documents, even where applicable court rules require that documents be provided to the general public. That’s troubling, and that needs to change.

Measuring Typosquatting Perpetrators and Funders

Moore, Tyler, and Benjamin Edelman. Measuring Typosquatting Perpetrators and Funders. Light Blue Touchpaper. February 17, 2010.

Reprinted at CircleID.

Introduction to Moore, Tyler, and Benjamin Edelman. “Measuring the Perpetrators and Funders of Typosquatting.” Lecture Notes in Computer Science. Springer-Verlag. Financial Cryptography and Data Security: Proceedings of the International Conference 6052 (2010).

Measuring the Perpetrators and Funders of Typosquatting

Moore, Tyler, and Benjamin Edelman. “Measuring the Perpetrators and Funders of Typosquatting.” Lecture Notes in Computer Science. Springer-Verlag. Financial Cryptography and Data Security: Proceedings of the International Conference 6052 (2010). (Introduction, Web appendix.)

We describe a method for identifying “typosquatting”, the intentional registration of misspellings of popular website addresses. We estimate that at least 938,000 typosquatting domains target the top 3,264 .com sites, and we crawl more than 285,000 of these domains to analyze their revenue sources. We find that 80% are supported by pay-per-click ads, often advertising the correctly spelled domain and its competitors. Another 20% include static redirection to other sites. We present an automated technique that uncovered 75 otherwise legitimate websites which benefited from direct links from thousands of misspellings of competing websites. Using regression analysis, we find that websites in categories with higher pay-per-click ad prices face more typosquatting registrations, indicating that ad platforms such as Google AdWords exacerbate typosquatting. However, our investigations also confirm the feasibility of significantly reducing typosquatting. We find that typosquatting is highly concentrated: of typo domains showing Google ads, 63% use one of five advertising IDs, and some large name servers host typosquatting domains as much as four times as often as the web as a whole.

Typosquatting: Unintended Adventures in Browsing

Edelman, Benjamin. “Typosquatting: Unintended Adventures in Browsing.” Cybercrime Gets Personal, McAfee Security Journal (fall 2008): 34-37.

Typosquatting is the practice of registering domain names, identical to or confusingly similar to trademarks and famous names, in hopes that users will accidentally request these sites–whereupon they will receive, typically, advertisements. This piece presents the basic typosquatting business model, based on my analysis of more than 80,000 typosquatting domain names. I analyze the advertising intermediaries that make typosquatting profitable, and I assess the legislation and litigation that are beginning to put a check on this practice.

Compliance with UDRP Decisions: A Case Study of

Compliance with UDRP Decisions: A Case Study of (June 2003)

After a URDP panel orders a domain name transferred from respondent to complainant, the respondent’s registrar is obliged to do so. However, practitioners report that this process sometimes proceeds unduly slowly, if at all. This research attempts to quantify the magnitude of the situation and to report specific domains not transferred to their UDRP complainants, UDRP decisions notwithstanding.

Research yields 23 domains registered by registrar, successfully challenged in a UDRP proceeding (one as long as three years ago), yet at the time of publication still registered to their original registrants at At least some of these domains seem to have been renewed by their current registrants, subsequent to UDRP decisions ordering their transfer.


Large-Scale Registration of Domains with Typographical Errors

Large-Scale Registration of Domains with Typographical Errors. (January 2003)

The author reports more than eight thousand domains that consist of minor variations on the addresses of well-known web sites, reflecting typographical errors often made by Internet users manually typing these addresses into their web browsers. Although the majority of these domain names are variations of sites frequently used by children, and although their domain names do not suggest the presence of sexually-explicit content, more than 90% offer extensive sexually-explicit content. In addition, these domains are presented in a way that temporarily disables a browser’s Back and Exit commands, preventing users from exiting easily. Most or all of the domains are registered to an individual previously enjoined by the FTC from operating domains that are typographic variations on famous names, and these domains remain operational subsequent to an injunction ordering their suspension.


Registrations in Open ccTLDs

Registrations in Open ccTLDs. (June – July 2002)

The author analyzes domain registrations and usage in the “open ccTLDs” of .CC, .TV, and .WS in order to quantify the domains’ size, usage, and registration patterns. Analysis first reports the number of open ccTLD web pages indexed by Google, finding open ccTLDs to be less than one one-hundredth as large as .COM when measured in this way. The author next considers registration of commonly-used dictionary nouns; while many such domains have been registered in the tested ccTLDs, more than 80% lead only to placeholders or to no web content at all. Finally, the author investigates open ccTLD registrations that use the same second-level strings as the primary .COM domains of major corporations worldwide (including the Fortune 1000 and Forbes International 500). Again, many such domains have been registered, and more than two thirds of such registrations are by registrants other than the registrant of the corresponding .COM. The web content available on sampled domains provides evidence both of substantial defensive registrations and of substantial cybersquatting.

DNS as a Search Engine: A Quantitative Evaluation

DNS as a Search Engine: A Quantitative Evaluation. (June – July 2002)

In the course of the Internet’s growing popularity, many Internet users have come to use the domain name system (DNS) as a directory and search engine: When trying to reach the web site of a new or unknown company, users often request the web page at the address, replacing “companyname” with a guess as to a site’s likely domain name. However, this DNS-based method is imperfect in that users may fail to correctly guess or remember a given company’s domain name, instead typically receiving errors or sites operated by other entities.

The research described in this article suggests that alternative search mechanisms, such as leading search engine Google, provide the content of interest with greater accuracy and reliability than does the DNS. This finding supports the claim offered by, among others, DNS software designer Paul Vixie, that DNS “is not a directory service and was never intended to be used as one.” This finding also quantifies Dan Gillmor‘s “Google effect” whereby Google replaces DNS as the preferred mechanism of locating content online.

Research further suggests that, while DNS offers what some might consider relatively high accuracy when conducting searches for top brands, companies, and organizations, DNS is substantially less accurate in searches for smaller brands, companies, and organizations.