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Comment by nojito | Hacker News Reader

Google will likely go under if they are broken up.

The prevailing theory is that their ad success is solely due to data sharing throughout their service offerings.

The search engine alone is a money printing machine even without sophisticated ads.

As an example, if I search for 'nike' right now, the first result is an ad payed by Nike leading to nike.com, the second is an ad for an independent webshop selling Nike products and the third is the first actual search result (almost not on the screen anymore), again leading to nike.com

So, effectively Nike is paying Google (a lot) to get the result they would have if there were no ads, or if people would type 'nike.com' into the address bar instead of 'nike'.

> So, effectively Nike is paying Google (a lot) to get the result they would have if there were no ads

Yes, but we live in a world with ads, so what they're actually paying for is making sure a competitor doesn't show up. That's why I consider branded keywords a racket.

I am shocked this isn't illegal yet. Basically what Google is doing in your example is selling Nike it's own trademark, with the subtle threat that if they don't, Google will use Nike's trademark to direct to a competitor instead.

The idea that Google can charge Nike to be the top result on a search for Nike is a form of subtle extortion, and I'd have to imagine trademark infringement. It's definitely a form of rent-seeking, as Google isn't actually helping advertise Nike: The people searching for it already knew where they wanted to go.

I have a suspicion a significant amount of their income comes from exactly that kind of extortion, and (very much relatedly) from tricking people who aren't Good at Computers into clicking ads that they think are search results, not from any machine-learning magic. At least as far as search ads are concerned.

I am very, very confident that this is true. I do not think people who actually know how the ad revenue is generated would like the public to know what percentage of Google's revenue is built on exploiting senior citizens' tendency to click on scammy ads, and trademark squatting such as this.

I spoke to a Googler a few days ago here about how a scam ad was being constantly perpetrated against seniors on Google's ad platform, screenshots included, here: https://news.ycombinator.com/item?id=24044837

I distinctly remember their experiments with inlining ads "ethically", and all the discussion about that by outsiders, and how the "ethically" part quietly went away and they settled on "clearly trying to trick people". I have no inside knowledge but can only speculate that those early experiments shot the profitability arrow so hard upward, and that every tweak making the results more deceptive did so even more, that they just couldn't resist becoming... well, what they became after that. And nearly all the difference between their numbers before and after those tweaks are, plainly, due to deception.

[EDIT] also and again directly related to their inlining of ads with search results, I've noticed a trend even among the reasonably tech-savvy to click an ad that is what they wanted... even when the natural result is just a couple entries under it. That's not sending people to the wrong place but it is gaining Google money from something that is exactly and entirely rent-seeking, as in it could go in an encyclopedia as a perfect and unequivocal real-world example.

Bear in mind designers at Google don't even realize/intend the harmful process they're doing too. If a "search page redesign" increases Google's revenue by 1%, it's a wild success... it doesn't really matter if the revenue when up by 1% because more people were "tricked" into clicking on ads. Some of the guilty parties might even just believe they were making the ads "look better".

It's also worth pointing out: Real search results actually go to the URL listed in the result. Ads can be redirected to third party tracking links which may or may not eventually send you to the correct real page. This has been exploited by scammers several times. Clicking the real search result is safer than clicking on the ad.

> It's also worth pointing out: Real search results actually go to the URL listed in the result. Ads can be redirected to third party tracking links which may or may not eventually send you to the correct real page. This has been exploited by scammers several times. Clicking the real search result is safer than clicking on the ad.

Oh, I know. I never, ever click ads even if they appear to (ultimately) go where I want, for exactly that reason, plus not wanting to give Google more scam-money. No one but us computer nerds know that, or should have to know that, though. (I'm aware I'm preaching to the choir here)

Trademarks are specific to context. Someone searching 'nike' could be looking for greek mythology. It's only trademark infringement when you use a word while engaging in the trade for which the trademark was registered

The same word can be (and frequently is) trademarked by multiple companies in different industries at the same time.

I would argue that when Google serves nike.com as the top real search result, over the nike.com ad it charges Nike to show, it's well aware of what context it's being used in. (I just tested, and Google does this, exactly. It stacks a pay-for-click Nike ad above Nike's home page, the top real result.

By context -- I am referring to the legally relevant context: use in trade. Google doesn't sell apparel, and they certainly don't sell apparel that is labelled 'Nike'.

Contrary to popular misconception, trademarks are not an exclusive right to a use word. They are an exclusive right to use a word for identification of a business' goods or services pertaining to particular trade.

If Google does not use the 'Nike' mark specifically to engage in one of the trades that Nike holds that trademark for, they are not infringing on the mark.

There may be another reason that Google's behavior here is not legal, but trademark infringement is not it.

Entertaining example of how trademarks are contextually scoped to a particular trade: https://en.wikipedia.org/wiki/Trademark#/media/File:LinuxWas...

>it's well aware of what context it's being used in.

I don't think so, I think it's just guessing. I just went and searched Nike to find the Greek goddess as suggested earlier, but it still showed me the shoes nike.com despite that being obviously wrong for what I wanted.

Using Nike as an example it's really just a judgement call on their part. If the next top bidder is a Nike retailer, they lose nothing if they don't bid on the term.

But they do it anyway, their call.

Of course there are examples where a company does stand to lose if they don't bid on their own name, and that sucks, but what's the solution? Give companies free top position on their name? How many variations of their name? Do they get related phrases too? What about when (as with Nike) the word can mean other things? What about when there are multiple claims on the same name? Does Nike the shoe company get a free spot over an educational page about Nike the goddess?

And so on... It's not an easy problem to solve, whereas letting companies choose what they want to bid on is simple.

Simple... and very profitable for Google. ;)

You can use a trademark as long as it's clear that you are not the owner of the trademark.

Sometimes there's an argument that a competitor buying an ad would be infringing. But google's definitely not infringing. The layman would never see this link and think it means that google search is a service from nike.

Definitely extortive though!

DHH talks about this. https://mobile.twitter.com/jasonfried/status/116898696270498...

Edit oops: it’s not DHH, it’s Jason Fried - Basecamp’s other cofounder.

I like all the proposed solutions in that thread involving brandname keyword bans and giving ad accounts time-outs for violations and such when the actual fix is to go back to putting ads somewhere other than inline with search results, and making it very clear that they're ads. The move away from that was pure evil, but I'm sure it's made Google a lot of money. It's crazy it doesn't count as some sort of fraud.

I don't see it. All the spinoffs will presumably still use federated Google sign-ins. They can simply contract with the Ads spinoff to share user data.

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