The Web's Million-Dollar Typos

Google Inc., which runs the largest ad network on the Internet, is making millions of dollars a year by filling otherwise unused Web sites with ads. In many instances, these ad-filled pages appear when users mistype an Internet address, such as "BistBuy.com."

This new form of advertising is turning into a booming business that some say is cluttering the Internet and could be violating trademark rules. It also has sparked a speculative frenzy of investment in domain names, pushing the value of some beyond the $1 million mark.

Google specifically bars Web addresses that infringe on trademarks from using its ad network, but a review of placeholder Web sites that result from misspelled domain names of well-known companies found that many of the ads on those pages come directly from Google.

"It seems very hard to reconcile Google's support of this activity with their "Do No Evil" motto," said Ben Edelman, a researcher at Harvard University who has done extensive research into advertising on unused domains.

Google is defending its business practices, saying that it removes participating sites from its ad network if a trademark owner complains that those sites are confusingly similar -- even though close misspellings don't necessarily prove that a legal infringement has occurred.

"Unless it is confusing to somebody, trademark law doesn't apply," said Rose Hagan, Google's chief trademark lawyer.

The Silicon Valley search giant is the largest but not the only ad network showing ads on placeholder Web pages -- Yahoo and Australian firm Dark Blue Sea run similar services.

This form of online advertising relies on "type-in traffic," the users who type the information they're looking for directly into the address bar of the Web browser instead of using a search engine to scour the Web. Industry analysts estimate that roughly 15 percent of all Web traffic originates this way.

That has created a demand for a practice known as "domain parking," which involves owners of a domain name "parking" that name with a firm that creates placeholder pages and then invites Google or other Internet ad networks to fill them with ads. When Web surfers arrive at those sites and click on those ads, Google and Yahoo get paid by the advertisers for that click and share their revenue with the owners of the domain names.

Opinion is split on whether these type of ad pages are good or bad. Some say they are nothing more than junk pages that frustrate people. But others, including those who speculate on potential traffic of a specific domain name, argue that the pages are helping people find information related to what they're looking for.

"We want those pages to function as alternatives to search engines,'' said Matthew S. Bentley, chief strategy officer for Sedo, a large parking service that manages more than 1 million unused addresses placed with the Google ad network.

The parked ad pages are mostly unattractive, but Sedo, Google and Yahoo have all said that they are working to improve them by adding more information. In most cases, it's the parking service that handles the creation of the ad sites.