With possible ramifications including legal limits on keyword-based search advertising, a federal judge has begun hearing arguments in insurance giant Geico's litigation against search king Google.
The questions includes whether Google's AdWords – which displays rival ads under "sponsored links" next to a user's search results – should be forced to stop selling ads to rivals who are triggered when users search “Geico,” and whether Google or any search engine or portal should be restricted to selling keyword ads using only generic terms.
Google was hit with the Geico suit last May, right after the search giant announced plans for its initial public offering later in the year, and the company said then it feared they faced heavy financial risks if they could be forced to restrict keyword ad sales to generic terms. Geico settled a similar suit with Overture in November.
Federal judge Leonie Brinkema heard Geico attorneys say December 13 that AdWords causes confusion for consumers. "When a consumers enters 'Geico'... and goes to the sponsored link believing there's a connection, that is where the confusion arises," Geico attorney Charles Ossola was quoted as telling Brinkema.
Google attorney Michael Page refuted that argument, saying Google's keyword search policy isn't different from supermarket checkouts distributing coupons for one product when a customer buys another company's equal or similar product.
Geico is seeking $8.65 million in alleged lost profits and a court order stopping Google from using Geico in its ad program, under which insurance competitors could bid to have their ads turn up any time a Web surfer searches for Geico.
Geico assistant vice president for marketing John McCutcheon told the court that if a surfer searches for Geico is sent to another insurance Web site unknowingly, "we've lost one opportunity."
