DirecTV, Dish engage in war of keywords

Companies take dispute over Internet search terms to court

Joyzelle Davis, Rocky Mountain News

Published December 29, 2006 at midnight

Text size  

• 0 Comments
• Email
• Print

DirecTV and EchoStar's Dish Network have gone to court in a dispute over the use of Internet search-engine keywords, one of the hottest areas in advertising and murkiest corners of trademark law.

DirecTV last month sent smaller satellite-TV rival EchoStar a letter threatening a trademark infringement suit over EchoStar's practice of buying the keyword DirecTV to trigger the appearance of sponsored links to EchoStar advertisements.

Douglas County-based EchoStar countered by heading to court to seek a ruling declaring that it was in the clear. Buying DirecTV as a keyword is "akin to comparative advertising, which fosters competition and aids consumers in making informed marketplace choices," EchoStar argued in papers filed in New York federal court.

The dispute illustrates the intersection of one of the fastest-growing areas of advertising with the less nimble rule of law. Search advertising will exceed Internet display advertising for the first time this year, according to Jupiter Research, which estimates that the search ad market will double to $11.1 billion in 2011, up from $5.1 billion last year.

"The law always lags behind technology, and if you think of what Google does, it's really unique in the history of civilization," said Andrew Burt, director of the Institute for Digital Security. "It's like if you called a librarian and said, 'Could you fax me everything you can find about DirecTV,' and the librarian includes an advertisement for Dish."

Advertisers from Fortune 500 companies to mom-and-pop shops use search-engine advertising. In the case of Google, advertisers bid on keywords using its AdWords service. When an Internet user enters that keyword, a sponsored link appears on the search results page, to the side of the general, algorithmic search results. The more an advertiser bids for a keyword, the higher its Web site will appear.

Buying the keywords for a competitor's trademarked name is a common strategy in search advertising, said Andrew Beckman, president of Denver-based SearchAdNetwork.

"A lot of advertisers decide that if they're going to buy their own trademark, then they're going to buy their competitors', too, so Internet users will see my name when they run a search" on a rival, Beckman said.

Google and Yahoo! Inc., the two biggest search engines, have different policies on whether an advertiser can bid on a competitor's trademark, said Patricia Hursh, founder and president of Boulder-based SmartSearch Marketing. Google lets advertisers bid on a rival's trademark (but the trademark can't appear in the ad copy), while Yahoo doesn't allow advertising on trademarks at all.

"It's an area we're all watching," she said. "I always tell our clients: If you want to be careful and conservative, stay away from the whole thing and don't advertise on trademark terms."

The DirecTV and EchoStar case could provide the precedent that the search engine advertisers are looking for, but it appears increasingly unlikely.

According to court papers filed this week by EchoStar attorneys, both parties are close to a settlement and are just "hammering out some of the technical aspects."

Featured

• Through Your Lens

  

  Submit your photos or see the Editor's Choice slide show here.

• Rocky Multimedia

  

  The news comes alive in our videos and slide shows. Catch up on what's happening today.

• Holiday Lights

  

  Is your house the jolliest on the block? Submit your holiday lights display.

• Holiday Gift Guide

  

  Looking to get a jump-start on the holiday shopping season?

• Mount Crushmore

  

  Which four Broncos greats should be immortalized on Mount Crushmore? Vote here.

• Bronco Dean's rant

  

  Listen to Bronco Dean's midweek rant on the Chiefs.

• Broncos Video

  

  Get the latest from Dove Valley as the Broncos prepare for Sunday's matchup.

• Calendar wallpaper

  

  Download this month's desktop wallpaper calendar

• Sam Adams' Open Mic

  

  Open Mic: Stirrin' the Soup with Matt Iseman