Making the internet friendly for brand dollars could be more difficult than many realize. Witness the latest flap between Google and a brand name advertiser.
In a legal case that could have far-reaching implications for the future of online advertising, Fashion retailer Louis Vuitton is fighting Google over its AdWords program. At issue is a legal challenge that's mostly been settled in the U.S. -- whether Google can be held responsible for selling keywords that infringe on trademarked names and phrases.
In the U.S., Google has largely prevailed on that issue, leaving brand advertisers little recourse when it comes to combating competitors who seek to boost their online reputations by piggybacking on an established name. But in France, the first round of the dispute has gone to Louis Vuitton, which will now have to face Google's appeal before the European Court of Justice.
While the case could establish a rule for online trademark infringement across Europe, it also highlights a growing problem for Google. Earlier this week, rumblings from major brand advertisers signaled growing discontent with Google. Many brand advertisers in the U.S. charge that Google has done little to root out the practice of piggybacking, which the brands say allows competitors to capitalize on their hard-won reputations.
Although more legal challenges are likely on the horizon, the big threat to Google could come on the business front. While few brand marketers will cross Google on search -- viable alternatives largely exist only as niche opportunities -- the fights for display, mobile and social networking appear to be relatively wide open. Google, which has staked earlier positions in each, will need support from brand advertisers to succeed. But right now, some brands are talking about punishing Google over issues like piggybacking.
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