Google to allow bidding on Brands in UK

Google announced today that, as of May 5 2008, it will allow open keyword bidding on all terms in the UK and Ireland, bringing these territories in line with the US and Canada.

Simply put, this means that the search giant has abolished its previous system in which a registered trademark could not be bid on by competitors.

Open keyword bidding was rolled out across the US and Canada in 2004 and means that competitors can now bid on a registered trademark, although they will not be able to use trademarked terms in their anchor text or text snippets.

For many, this is unlikely to be welcome news, although some major price comparison sites could see advantages. Until now, clients in the UK and Ireland have benefited from a large amount of relatively cheap traffic from searches on their brand name. The new move is likely to mean trademark holders and competitors will need to significantly increase their bids for the top spots on crucial brand keywords.

The roll out looks on the face of it a very clear revenue boosting idea by Google and no apparent benefit to the leading brands, users or ISPs with all the revenue flowing to Google. The biggest impact is likely to be in developing keyword navigation from the browser address bar which has traditionally been a source of significant revenue for both MSN via Internet Explore and Google via both Internet Explorer and more explicitly via Firefox.

This technique of Direct Navigation was first pioneered by RealNames between 1999 and 2002 before they closed at the behest of MSN. Simply typing a keyword such as “Amazon” into the browser address bar would take you directly to the Amazon site applicable to the territory setting in your browser. After the demise of RealNames, MSN has taken this traffic to MSN search and benefitted from the sponsored listings in a relative benign way although generating millions of dollars in PPC revenue. Google were quick to spot the opportunity and have similarly “hijacked” this traffic from the address bar to their search results. They took this a further step forward when they signed an exclusive deal with Firefox to send all keyword traffic to either search results or on “exact match” to the site in question. Now they are introducing bidding on these terms where will the “exact match” branded keyword go now.

You may feel that this is an excellent use of the web and Google are performing a fair service. However, the browser address bar is not owned by Google or MSN and any interference of outgoing traffic is the same as ease dropping on a phone call being dialled and redirecting the requested call to an alternative location of their choosing. Typing a keyword into a browser address bar is a “DNS error”. Under law you can only redirect it after a NXD or Non-existent domain error has been generated by the Authoritative Name Servers (ANS). So why has MSN and Google got away with this abuse? Well MSN won the right to be able to do this activity in the US and indeed all such search requests are indeed redirected to their servers in Redmond cost the ISPs significant transit costs. Google on the other hand have no such “get out of jail free card”, but have continued to redirect keyword traffic straight from the browser bar. This is not a cost free service since the ISPs naturally end up picking up the transit costs. Now Google wants a larger slice of the cake by forcing Brand names to bid up their own trademarks.

Two bodies who could deal with this issue, ICANN and the ITU, seem strangely silent on this activity and seem content to let Google and MSN to make unreasonable profits paid for by the ISPs.