October 21, 2008, 9:27 AM — Harvard Business School professor Benjamin G. Edelman estimates Google makes between US$32 and $50 million in gross profit each year -- potentially much more -- from placing its AdSense text ads on so-called "typosquatting" sites.
The scam has been around for years. Companies will buy domains like "ccartoonnetwork.com" or "bankkofamerica.com" hoping that users will misspell domain names when entering them in the browser window. Then, when users land on those pages, they click the Google AdSense ads that are on the pages, generating revenue for Google and the company that bought the domain name. The loser, says Edelman, is the company whose trademarks have been infringed.
There's another issue, too. Google offers a special AdSense program targeted specifically at parked domains. Does the AdSense for Domains program make Google responsible for typosquatters and their trademark infringement? That's the question that Vulcan Golf, LLC v. Google Inc. et al is attempting to address. The class-action suit was filed last June, and accuses the search giant and various typosquatting companies of trademark infringement. However, the case is a long way from resolution.
Professor Edelman, who is a participating lawyer for the plaintiff in the class, wrote in the McAfee Security Journal (he is also an advisor for McAfee) that McAfee found 80,000 domains typosquatting on the top 2,000 web sites and notes that several large companies, including Neiman Marcus and Microsoft, have gotten big settlements from typosquatting companies.
In a written statement to The Standard about the lawsuit a Google spokesperson said "we believe that these claims are entirely without basis, and we are vigorously defending ourselves."