[December 13, 2004]

Geico vs. Google in Court Battle Over Ads Placement

BY JOHANNE TORRES

Virginia Federal district Judge Leonie M. Brinkema will be presiding during day one of the Geico vs. Google court trial this morning. The car insurance company is suing the search engine giant for copyright infringement. The court decision of this legal fist fight over advertising placement alongside search results threatens to change the way Google successfully conducts online business forever.

Geico is suing Google (news - quote) for strategically placing advertisements of other competing car insurance companies alongside search results displayed when conducting a search with �Geico� as the keyword. In addition to suing Google, the car insurance is also accusing Web portal Yahoo! and paid listings provider Overture for placing paid ad listings from other car insurance companies next to the Geico search results.  Yahoo!, (news - quote) along with Overture settled with Geico two weeks ago. Terms of that settlement were not released at press time.

It was reported that Google contends its keyword bidding mechanism only lets rivals compete fairly. In an attempt to dismiss the case before trial, Google presented a motion that said: "Stripped of its high-tech trappings, Geico alleges only that Google permits its advertisers to compete head-to-head with Geico, by targeting their advertisements at potential Geico customers." Google's motion to dismiss the case without a trial was rejected by Judge Brinkema. The judge announced: "When defendants sell the rights to link advertising to plaintiff's trademarks, defendants are using the trademarks in commerce in a way that may imply that defendants have permission from the trademark holder to do so."

Google�s money-making business model is definitely being discussed in court today. The model succeeded in raising the company�s revenue to a whopping $806 million during this year�s third quarter. It looks like Google might be asked to change its business practices dramatically if the Judge rules in favor of Geico.

This trial should last until the end of this week, and will be held without a jury. I will definitely keep you posted as soon as any new developments in this case and a final Judge ruling become available.