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Google, like Slick Willie Sutton, goes where the money is

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Tue, Mar 23, 2010 at 5:42 pm

    Google is crowing about a decision from the European Court of Justice Tuesday that says it has
    the legal right to continue exploiting other people’s good names in its
    quest to pile up more cash.

    So it may be legal, but does that make it right, particularly for a company that claims to march to the sound of a unique corporate motto: "Don’t be evil"?

    The court said it’s OK legally for the Internet giant to auction off trademarked names as part of its AdWords system to advertisers other than the brand owners. LVMH Moet Hennessy Louis Vuitton, a French luxury goods company, had sued arguing that only the company or authorized sites should be able to buy ads linked to such brand names as "Louis Vuitton" when entered as a search term.

    A colleague of mine disagrees with the court and thinks selling ads keyed to somebody else’s brand name is akin to shoplifting. Call it what you like, it’s part of a very profitable enterprise. Google makes most of its $23 billion in annual revenue by auctioning ads tied to search words in its AdWords program.

    Brand name holders are understandably upset about the sale of their trademarked names fearing they’ll lose control of their brand.   Because Google uses an auction system to sell the ads, they also worry that letting others bid on them increases the ad cost.

    That of course means — surprise, surprise, ka-ching, ka-ching — more cash for Google.

    The ruling, as the New York Times’ Eric Pfanner notes, was hardly a complete victory for Google.  Many of the ads themselves may turn out to actually infringe on trademarks.  The advertisers would be liable for that, as would Google unless it removed the ads promptly when brand owners complained. The court also said Google would be liable if it were found to have encouraged trademark violations or counterfeiting.

    While legal experts are parsing the European decision, discussing the likelihood of further suits and its applicability to the United States where similar cases are pending, the case prompts me to think a minute about Google’s entire business model.

    Simply put, the Internet giant makes its money by riding on the backs of others. Google grabs content and sells ads against it, or it uses trademarked brand names and sells ads against that.

    If Google executives allow an ad that breaks the law, well, they’ll take it down. Ka-ching. After you tell them. Click, ka-ching.  "We’ll just do it, ka-ching, ka-ching," they say, "until you tell us, ka-ching, there’s a problem. Ka-ching. Then we’ll, ka-ching, take it down…"

    Don’t ask permission, ka-ching, ka-ching, you can always ask, ka-ching, ka-ching, forgiveness.

    I wouldn’t mind as much if Google were at least honest about its business model and what it’s doing. My boyhood idol Slick Willie Sutton was famously quoted as saying he robbed banks "because that’s where the money is."  

    Google invariably falls back on a sanctimonious explanation of its business activities; in discussing the European court decision Google said:

    "Our guiding principle has always been that advertising should benefit users, and our aim is to ensure that ads are relevant and useful."

    Can you imagine if Sutton had explained that he robbed banks to "ensure tellers provide a good experience for consumers?"

    Hey, Eric, Larry and Sergey, take a lesson from Slick Willie Sutton. Just admit you’re in it for the money and that you’ll go wherever you find it.

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    This post was written by:

    John M. Simpson

    - who has written 414 posts on Inside Google.

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