I would beg to differ with you both.
Consider this situation as a better analogy. You get in a taxi cab and tell the driver “take me to McDonalds”. On its way to your requested destination the taxi makes a stop in front of a Burger King and offers you to go there instead. Burger King compensates the driver by paying him a fee for his effort at swaying you from your clearly stated decision to go to McDonalds and not Burger King. Even if the driver reminds you that his suggestion is not your actual requested destination, and even if he clearly states that this stop is a “sponsored stop” it would still be improper.
It is one thing for you to see other restaurants and ads on the way to McDonalds - it is quite different for the driver to take you to the door of other restaurants in exchange for compensation by those establishments.
The comparison of this situation with meta-tags is very well placed. There are some similarities as well as some clear distinctions. While meta-tags may properly be used for description of a page they may also be improperly used merely for diverting traffic based on false and deceptive terms. This applies to both trademarks and non-trademarks.
While the courts have ruled that use of trademarks by competitors simply in an attempt to appear on search engine results is not proper they have also ruled that if the trademark is used in a truthful context to describe the page it does not violate the trademark owner’s right. If a registrar places the trademark “Godaddy” repeatedly in the meta-tag and also embeds it in the actual text to increase its standing in a search of Godaddy such use is deemed an infringement on Godaddy’s rights. If however the meta tag or the text make use of a truthful statement such as “better than Godaddy”, “cheaper than Godaddy” etc. such use is considered fair use.
See
http://searchenginewatch.com/resources/article.php/2156551 for more.
This issue does not in anyway curtail the promotion of competitive advertising by competitors. It merely places limits when a product A is being offered to a customer when he has specifically asked for product B. It is ok to display Coke products next to Pepsi in a supermarket isle marked “beverages”. It is not proper to display Coke products on a shelf marked “Pepsi” - even if there is a small disclaimer below the Coke product indicating “sponsored beverage”.
Imagine calling the phone directory, asking specifically for Godaddy’s phone number, and being offered the phone number of a Nationhost instead - simply because Nationhost has agreed to pay the directory a fee every time it succeeds in diverting the caller to Nationhost instead of Godaddy! I maintain Godaddy would have a valid claim for filing a complaint against the phone directory and Nationhost for such a practice.