• by Mark Naples , March 3, 2006

The lead story this past Monday in Online Media Daily was on Yahoo's announcement that it was no longer going to permit advertisers to bid on competitors' trademarked keywords.

Is it just me, or did anyone else think that this announcement came a few weeks too late--or even longer? Why would I think that? Let's start with what's at stake.

How much revenue could the practice of buying competitors' trademarks possibly drive for the major search engines? Is it one percent? Is it five percent? After speaking with a few SEM experts, I'd say it's probably less than one percent--a lot less.

Okay, so why continue to do it, if--as many industry experts think--stopping this business practice may encourage large brand marketers to increase their search marketing efforts? Wouldn't you put less than one percent of your revenue at risk if it meant luring much more business from far larger clients?

That may be a good reason to stop allowing advertisers and their SEM agencies to do this. Actually, it's a great one, especially since eliminating that practice merely would force the few maybe wee bit scurrilous companies that buy their competitors' brands to buy other terms within their plans. But here's another reason that may be even better. Yahoo had a chance to stick a needle in the eye of its chief rival, Google, and it completely whiffed on it.

Dozens of advertisers have long been annoyed by this practice. Just in my own travels, I've heard about multiple cases of CEOs calling other CEOs and asking them to quit it. So, why didn't Yahoo make a big splash around its decision to discontinue it around the time that CNG had sued Google? As OMD's Wendy Davis clearly chronicled, CNG Financial Corp. filed suit on this topic against Google in federal court in Ohio about a month ago.

Unlike the trademark infraction suit brought by Geico against Google and Yahoo in 2004, here was Google being singled out for the business practice from which Yahoo now has disengaged itself.

Yahoo settled the Geico case in late 2004, but Google fought it and won when the judge dismissed the heavier elements of it. So, Yahoo clearly wanted no part of this battle--a winnable battle, it would seem--even then. If you're Yahoo, don't you think you'd start planning an exit from the practice around that time? You'd be ready for the right opportunity, wouldn't you?

Well, just within the past month, Yahoo had a chance to kick Google when it was on its way down, forced to defend its "Do No Evil" mantra while stiff-arming the U.S. Department of Justice with one hand and painting itself into a corner with the other by not providing meaningful guidance to Wall Street prior to earnings--all within the wake of the recent CNG lawsuit. Why didn't Yahoo schedule this announcement for a time when so many analysts and reporters were asking Google why it said "no" to the DOJ?

Why didn't Yahoo say it had stopped the practice because enough of the brands that buy on their search pages told them they didn't like it? Wouldn't it have been great to see the quote read along these lines?

There are enough major brands that have made it clear to us that they don't like this kind of buying, and we feel that, as stewards of the interactive marketplace, we want to foster best practices instead of having to do battle to defend practices that even a small portion of our advertisers object to.

In short, as search engine marketing grows into a more significant part of the media mix, we just thought it was the right thing to do. Brands and their agencies that want to buy competitors' names are welcome to do so--on other search engines.

Now THAT would have been downright evil.