In 2008, Google, Inc. (Google) earned $21.79 billion in revenue. Of that, 97 percent came from advertising. Google, like other search engines, earns much of its advertising revenue from the sale of “keywords” to advertisers. Once an advertiser purchases a keyword, its advertisements appear as a “sponsored link” anytime the keyword is entered in a search. Advertisers generally purchase keywords by bidding an amount they are willing to pay each time a consumer clicks on their advertisement.
Search engines have long permitted advertisers to use other parties’ trademarks as keywords. Advertisers use the trademarks in two different ways. First, trademarks are used as keywords but not in the text of the advertisement. For example, when a user searches for “Travelocity” on Google, one of the sponsored links is for “Priceline.com.” The term “Travelocity” is never used in the advertisement. The use of the trademarked term is in the advertiser’s (e.g., Priceline’s) communication with Google while selecting and bidding on relevant keywords, as well as in the user’s entry of the term in his search. Second, trademarks are explicitly referenced in the text of advertisements and used as keywords. For example, if the advertisement reads: “Priceline.com has better deals than Travelocity.”
