Google making millions with ads on unused sites

[fonzie_007]

See the link to the article here: http://www.startribune.com/484/story/402180.html

Google making millions with ads on unused sites
The tactic has sparked a speculative scramble to register unused domain names and test their ad potential -- and a debate about trademarks and Internet clutter.
Leslie Walker and Brian Krebs, Washington Post

Google Inc., which runs the largest ad network on the Internet, is making millions of dollars a year by filling otherwise unused websites with ads. In many instances, these ad-filled pages appear when users mistype an Internet address, such as "BistBuy.com."

This new form of advertising is becoming a booming business that some say is cluttering the Internet and could be violating trademark rules. It also has sparked a speculative frenzy of investment in domain names, pushing the value of some beyond $1 million.

Google specifically bars Web addresses that infringe on trademarks from using its ad network, but a review of placeholder websites that result from misspelled domain names of well-known companies found that many of the ads on those pages come directly from Google.

"It seems very hard to reconcile Google's support of this activity with their 'Do No Evil' motto," said Ben Edelman, a Harvard University researcher who has studied advertising on unused domains.

Google is defending its practices, saying it removes participating sites from its ad network if a trademark owner complains those sites are confusingly similar -- even though misspellings don't necessarily prove a legal infringement. "Unless it is confusing to somebody, trademark law doesn't apply," said Rose Hagan, Google's chief trademark lawyer.

The way it works

The Silicon Valley search giant is the largest but not the only ad network showing ads on placeholder Web pages. Yahoo and Australian firm Dark Blue Sea run similar services.

This form of online advertising relies on "type-in traffic": users who type the information they're looking for directly into the Web browser's address bar instead of using a search engine to scour the Web. Industry analysts estimate that 15 percent of all Web traffic originates this way.

That has created a demand for a practice known as domain parking, which involves owners of a domain name "parking" that name with a firm that creates placeholder pages and then inviting Google or other Internet ad networks to fill them with ads. When Web surfers arrive at those sites and click on those ads, Google and Yahoo get paid by advertisers for that click and share their revenue with the owners of the domain names.

Two sides to the issue

Opinion is divided on these types of ad pages. Some say they are nothing more than frustrating junk pages. Others, including those who speculate on potential traffic of a specific domain name, say they help people find information related to what they're looking for.

"We want those pages to function as alternatives to search engines," said Matthew Bentley, chief strategy officer for Sedo, a parking service that manages more than 1 million unused addresses placed with the Google ad network.

The practice has sparked a speculative scramble to register unused names and test their ad potential. Because purchasers can change their minds within five days and avoid paying the $6 registration fee for the name, many investors enter the names in Google's ad program for a quick test and quickly drop those that don't yield enough clicks to cover the domain registration fee.

Ron Jackson, publisher of DNJournal.com, an online publication that covers the industry, said he has bought 6,600 domains and uses several different ad services to earn revenue on them.

Google won't disclose how much revenue it earns from ads on these types of sites.

 

[123finder.com]

It's on WashingtonPost and references on SlashDot too:
http://www.washingtonpost.com/wp-dyn/content/article/2006/04/29/AR2006042900279.html

Good (and bad) exposure for our industry!

 

[gazzip]

Wow - that's a helluva lot of testing ! - I think the process of testing domains before you buy should not be allowed personally.

Of the 30 million dot-com names registered worldwide last month, more than 90 percent were dropped, according to domain name registrar GoDaddy.com. As a whole, the Internet has only 54 million active .com and .net addresses, according to VeriSign Inc.

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[fonzie_007]

Of the 30 million dot-com names registered worldwide last month, more than 90 percent were dropped, according to domain name registrar GoDaddy.com. As a whole, the Internet has only 54 million active .com and .net addresses, according to VeriSign Inc.

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While I knew there was abuse going on with the drop process, I did not know it was this pervasive.

 

[RareIQ]

and days go "buy".................

 

[RickM]

Action will be taken against abusers soon...they wont have a choice, it will have to be done.

 

[Snurf]

Ooh close to home, the Star Trib. is my paper :P

Interesting article...