According to a report in Media Post Today, Google has been hit with a fraud lawsuit from its parked domain program, which serves pay-per-click ads on Web pages for a third time this summer.
This newest case, a potential class-action lawsuit, filed this week in federal district court in Chicago, was brought by a container company, JIT Packaging.
The case joins a putative class-action lawsuit filed in San Jose, Calif. last month by Hal Levitte, an attorney who took out search ads, and one brought in San Jose by online retailer RK West, which operates the e-commerce site Malibu Wholesale.
As in the other two lawsuits, JIT Packaging alleges that Google displayed search ads on “low-quality” sites that yielded almost no conversions.
The Illinois company specifically takes issue with Google’s AdSense for Domains and AdSense for Errors programs, which place ads on sites that have little or no editorial content. Users often land on such sites after mistyping a URL.
Examples cited in the complaint include jcpennycom.com and bedbathandbeyondcom.com.
“The quality of these sites as an advertising medium is substantially lower than sites on the rest of Google’s network,” the lawsuit alleges.
JIT also asserts that many of these sites violate trademark, copyright or cybersquatting laws because they include a brand name in the URL. Therefore, the company argues, Google should not have served ads on them.
“Google breaches its contractual obligations to JIT and the class when it displays and/or charges them for their AdWords advertisements displayed on sites that Google is not legally entitled to use, sites that violate trademark law, sites that violate cybersquatting law … and sites that violate other Illinois, United States and/or international laws.”
A separate case against Google, accusing it of trademark infringement stemming from its parked domains program, is currently pending.
In that case, golf club manufacturer Vulcan Golf argues that Google violates the Vulcan Golf trademark by serving of ads on sites with URLs that appear similar, such as vulcanogolf.com.
To some extent, this wave of parked domain lawsuits reflects marketers’ perceptions that they are not just paying for clicks when they advertise online, but are purchasing leads, said Greg Sterling, principal of Sterling Market Intelligence.
“On TV and radio, there are a lot of wasted impressions. But given the nature of the medium, people are not as angry about it. Nobody files a class-action lawsuit saying, ‘Hey, there are a lot of people who may have seen these ads who aren’t really bona fide prospects,'” he said.
This is another indication of some recent rumors that Google is going to stop PPC parking on at least trademark domain or domains not lightly to receive type in traffic.
Google certainly is not going to stand pat and just wait for more class action to be filed against them.
Rick Schwartz has been saying for a while the greatest threat to the domain industry is from within.
Matter of fact because no one says it better i’m going to quote him:
“”” I am MUCH more fearful of those INSIDE the industry that are abusing it for short term gain at the expense of those that are going to be here for a lifetime”””
Correct.
Those domainers who registered trademark domains, taking the short money are killing the industry.
The registrars who continue to sell trademark domains, most recently the .me registry, are killing the industry.
Auction systems like TDNAM.com which allow the sale of trademark domains through there system are killing the industry.
Who is going to stop it?
Maybe Google
By killing the industry.
Interesting article. The domain industry is an easy target because Google’s service is “Adsense for Domains”. If only Google would come out with an “Adsense for MadeForAdsense sites” then the laywers would have something easier to target. The MFA sites are the real problems with generating low conversion rate.
Having both a domain business and a software company, I can say that my software company has received far more leads from parked domains of long-gone competitors than I have received leads from mfa sites or spam blogs.
Maybe Google needs to develop a Premium publisher type of program where domain owners submit domains to Google for review before they will show adsense?
On the parking side, maybe the parking companies should submit their parked domains for review. Parked.com says Yahoo screens or blocks domains with “sensitive” keywords.
I think this will all work out but of course there will be winners and losers all around.
If you run a clean operation and have clean domains, there will always be opportunities to monitize the traffic.
I hope google will take a quick action to BAN all parked typo domains using its feed.
Subash
I don’t deal in typo domains, but one person’s typo is another person’s brand. Thing Flickr and Flicker, Dig and Digg.
As with many areas in business, it becomes costly to regulate and someone has to cover that cost. It also creates an opportunity for the big guys to “game” the system. My money says that a professional typo domainer will figure out some way to protect his investment and circumvent any filtering process.
Terrell
Not if Google turns off the domain channel