Google has grown to become the world’s leading Internet company based largely on accurate search results, yet its financial success owes much to tiny advertisements that are posted as sponsored links alongside the "organic" search results. The determination of which sponsored links appear on a Google search result page comes in part from a keyword advertising system in which marketers bid on specific words. Whenever a user clicks on the sponsored link, the marketer pays Google the bid amount. Each click may only cost a few pennies, but with millions of clicks every day, the keyword advertising business is a multi-billion dollar business for Google and has been emulated by competitors such as Yahoo and Microsoft.
Keyword advertising has been a huge commercial success fueling many ad-supported websites, but it has not been without legal controversy. The practice has generated a steady stream of cases addressing whether the use of a competitor's keyword raise potential trademark or misleading advertising issues. For example, is Coca-Cola permitted to bid on the Pepsi keyword so that when an Internet user searches for Pepsi they are presented with a sponsored link for Coke?
The issue has been litigated in other countries, but my weekly technology law column (Toronto Star version, homepage version) notes that late last month a B.C. court provided the Canadian perspective for the first time.